On December 1st, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). Working to delay the deadline is the Poker Players Alliance (PPA).
In May, Congressman Barney Frank (D-MA) introduced HR 2266, more commonly known as the Reasonable Prudence in Regulation Act. Frank’s piece of legislation pushes back the looming compliance date from December 1st, 2009 to December 1st, 2010, essentially extending the status quo by one year. In the interim, lawmakers on Capitol Hill could, in theory, devise a lucrative method for taxing and regulating the internet gambling industry in the United States, potentially reaping over $60 billion in revenue in the process.
HR 2266 currently boasts 48 cosponsors, including Andre Carson (D-IN), Jerrold Nadler (D-NY), Bennie Thompson (D-MS), and Melvin Watt (D-NC), who signed on to open the month of October. Despite the outpouring of support, PPA Executive Director John Pappas told Poker News Daily that other avenues besides the legislative process are being pursued since the December 1st deadline is rapidly approaching: “We are working with Barney Frank and others for a non-legislative solution to clarifying or delaying the UIGEA regulations. Given everything on the Chairman’s plate, one thing off of it is a good thing. We’re hoping to see a delay.”
One strategy the PPA is potentially pursuing is utilizing the Administrative Procedure Act. According to About.com, the law is typically used by federal agencies to create regulations to enforce laws passed by Congress. The Administrative Procedure Act was passed in 1946 and Pappas noted that the measure “allows for individuals and organizations like the PPA to weigh in with the Department of the Treasury and ask for a delay of a proposed rule.” As many poker players remember, the regulations of the UIGEA were rubber-stamped as “midnight rules” by the outgoing Bush Administration. They were officially adopted on January 19th, one day before U.S. President Barack Obama assumed office.
Working against the industry as the December 1st deadline approaches is the precarious state of the U.S. economy, which saw unemployment rise to 9.8% in September. In addition, Obama and others on Capitol Hill have been steadfastly pushing health care reform, which has also taken center stage. Consequently, issues like internet gambling have fallen by the wayside. Pappas explained, “The reality is that our country is facing a lot of challenges. From a poker player’s perspective, the UIGEA may be the top priority, but it’s not the top priority of Congress. Until Barney Frank can solve the issues facing his Committee, ours is not going to take precedence.” Frank chairs the Financial Services Committee.
Also expected is a letter authored by Frank and two-dozen other politicians to Treasury Secretary Timothy Geithner calling for a delay of the UIGEA regulations. As of the time of writing, no such letter has come to fruition. Others, including gambling law expert Nelson Rose, question whether the industry will see any changes after the December 1st deadline passes. In a July interview, Rose told Poker News Daily, “The whole program focuses on due diligence on new accounts. If you’re crazy enough to set up a bank account with an American bank, they’ll ask if you’re involved in illegal internet gambling.”
Frank has also introduced HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The measure has attracted 60 cosponsors, including Shelley Berkley (D-NV), Steve Cohen (D-TN), Ron Paul (R-TX), and Robert Wexler (D-FL). HR 2267 was introduced on the same day as HR 2266 and establishes a complete licensing and regulatory framework for the internet gambling industry in the United States.
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