Defeat of the Frank/Paul Bill
Last week, the Frank/Paul bill was defeated by the House Financial Services Committee. This bill aimed to prevent the Treasury Department and the Federal Reserve from implementing regulations to enforce the Unlawful Internet Gambling Enforcement Act (UIGEA).
Proposed Amendment by Rep. Peter King
Rep. Peter King (R-NY) proposed an amendment to halt the implementation of UIGEA regulations. This amendment also sought to compel the Justice Department, the Treasury Department, and the Federal Reserve to define what constitutes unlawful Internet gambling. Although the Committee adopted the amendment, the King bill itself was ultimately defeated. The vote was split evenly, with 32 in favor and 32 against.
Impact on the Online Gambling and Banking Industries
The defeat of both the Frank/Paul bill and the King amendment is a setback for the online gambling industry, which has been seeking ways to overturn the UIGEA. It also represents a blow to the banking industry, which has been reluctant to engage in the regulation of online gaming.
Lack of Clarity on "Unlawful Internet Gambling"
The Financial Services Committee did not provide a clear definition of "unlawful Internet gambling" under the UIGEA. The King Amendment would have required formal rulemaking with an administrative law judge to establish this definition. However, without a valid definition, the Federal Reserve, Treasury Department, and banking industry argue that enforcing the UIGEA remains impractical.
