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UIGEA Implementation Delayed by Geithner & Bernanke

The deadline loomed over the poker community, and the ominous cloud seemed to darken as the days of November passed. The pieces of legislation introduced in Congress by Rep. Barney Frank and Sen. Robert Menendez to overturn UIGEA and legalize online gaming had been shelved indefinitely due to pressing issues in Congress like health care. No action meant that UIGEA (Unlawful Internet Gambling Enforcement Act of 2006) was to require enforcement by financial institutions on December 1, 2009.

One of Frank's bills meant to extend that deadline by one year, but the Reasonable Prudence in Regulation Act of 2009 (H.R. 2266) was on hold with the other proposals until Congress came to grips with the financial crisis and health care reform. American financial institutions were none too anxious to have to enforce UIGEA regulations due to their ambiguity, but they were beginning to prepare for the December 1 date by sending letters to online gaming customers to inform them that no transactions would be honored with online gaming websites as of December 1.

But groups like the Poker Players Alliance knew that once the UIGEA was fully implemented, it would be tougher to overturn the law and reverse it. So the PPA coordinated with other groups that would be affected by the December 1 date, namely the National Thoroughbred Racing Association and American Greyhound Track Operators Association, and filed a petition to postpone UIGEA's enforcement date. Prompted by the petition and subsequent lobbying, various members of Congress drafted a formal request to delay the date by one year. Led by Rep. Frank, others like William Clay, Peter King, Ron Paul, Melvin Watt, Judy Biggert, and Luis Gutierrez, signed as well for a total of 19 names.

The letter was addressed to Secretary of the Treasury Timothy Geithner and Chairman of the Federal Reserve System Ben Bernanke, and it read, in part: "On January 19, the Federal Reserve and Treasury Department issued regulations implementing the UIGEA but this rulemaking has saddled your agencies with the implementation of the flawed statute. We realize this is not a task you requested. We also believe this is an unreasonable burden on regulators and the financial services industry at a time of economic crisis, and it contradicts the stated intent of the Financial Services Committee." After also noting that the proposed legislation by Frank and/or Menendez would solve the issue but require time to obtain committee votes and send to the floor, the letter asked for a one-year delay on the UIGEA's enforcement.

The letter went unaddressed for weeks ... until November 27, when Geithner and Bernanke approved the delay. However, they only granted legislators a six-month delay. The response from the Federal Register, in part, stated, "While the final regulation affords regulated entities maximum flexibility in establishing and implementing policies and procedures that are reasonably designed to prevent or prohibit unlawful Internet gambling transactions restricted by the Act, the Agencies acknowledge some of the challenges regulated entities are experiencing with the Act's definition of 'unlawful Internet gambling.' Moreover, as noted above, several members of congress have indicated interest in revising the Act. The Agencies are thus persuaded that a limited extension of the compliance date for regulated entities is appropriate."

The news lifted the cloud from the online poker industry temporarily. Meanwhile, Rep. Frank scheduled a hearing to consider expert testimony regarding online gaming in the hopes that H.R. 2267 (Internet Gambling Regulation, Consumer Protection & Enforcement Act of 2009) be considered and pushed to a vote in the Financial Services Committee.

The poker community and its supporters in Congress now have six months to make something happen. It is time to move it or, literally, lose it.

Jennifer Newell is a compulsive writer. In addition to Poker Player Newspaper, she writes for numerous publications and blogs at Pokerati.com as California Jen. In her little bit of spare time, she plays poker, too. Contact her at jen3351@msn.com.

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