PINcept.com: Barney Frank Releases Details of Online Gambling Bill

Barney Frank Releases Details of Online Gambling Bill

US online gambling bill: details revealed

Legislation aimed at legalising online gaming in the US was published today.

The InternetGambling Regulation Consumer Protection & Enforcement Actregulation, published by Barney Frank, chairman of the US FinancialServices Committee, seeks to overturn the Unlawful Internet GamblingEnforcement Act (UIGEA) passed in 2006, which outlawed online gamblingin America.

The billproposes issuing licenses to operators who are ‘‘in good financial andlegal standing and of good character, honesty and integrity” and “whoseprior activities, reputation, habits and associations do not pose athreat to the public interest or to the effective regulation andcontrol of of the licensed activities.”

Operators will have to demonstrate that they have sufficient expertisein online gambling and sufficient financing to take bets, and that theyhave the systems and technology in place to combat money laundering andfraud, enforce relevant federal, state and Indian tribal laws includingtax collection on bets, and to protect children and problem gamblers.

The proposed licenses would last for five years. Anyone would be ableto apply for a license provided they meet the conditions above and thatthey provide their financial statements, and the criminal and credithistories of directors.

The documentproposes that the exact procedures for running background checks willbe decided by the Secretary of the Treasury later. The Secretary willbe charged with approving and monitoring licensees, and may call on theAttorney General to compel compliance.

The bill wouldprovide Treasury the authority to terminate the licenses of operatorswho fail to comply with the bill’s provisions, as well as to imprisonthem for up to five years.
Frank said he intends to move the bill before the House's August break.

Frank alsoannounced today that he is introducing separate legislation to delaythe implementation of regulations in the UIGEA, which are due to gointo effect on 1 December, until Congress has had a chance to decidenational policy.

The UIGEA waspassed in late 2006 and requires US financial institutions to blockpayments from US citizens to internet gambling companies. It came intoeffect on 19 January this year, but banks and other financialinstitutions have until 1 December to comply.

Frank'slegislation is likely to be opposed by many Republicans, who dominatedthe House of Representatives when the UIGEA was passed in 2006 underBush. However Democrats are currently in control in both the House ofRepresentatives and the Senate, although Obama has not yet indicatedhow he will handle the issue.

While companieslike Sportingbet and 888 withdrew from America after the UIGEA waspassed, many still face possible US criminal prosecution for theiractivities there before 2006. PartyGaming recently settled with USauthorities for $105m, clearing the way for an M&A push (more).

Sharesin PartyGaming and 888 rose today on hopes that Frank will succeed. 888shares rose 7% to 104.75p; PartyGaming shares rose 6% to 276p.

More: American gaming industry split on online gaming bill.