This article needs to be updated. Please update this article to reflect recent events or newly available information. Introduced in the House as H. 317-93 Roll call vote 363, via Clerk. 98-0 Roll call vote 249, via Senate. 409-2 Roll call vote 516, via Clerk. Signed into law by President George W. United States legislation regulating online gambling.
The Act was passed on the last day before Congress adjourned for the 2006 elections. House Conference Committee had seen the final language of the bill before it was passed. Among the Congressional supporters of the Act were Rep. Jim Leach , a former chairman of the House Banking Committee and Rep. Robert Goodlatte , who co-authored H. The Internet Gambling Prohibition Act, a prior version of the gambling part of the bill passed the House in 1999 but failed in the Senate in part due to the influence of lobbyist Jack Abramoff. 5364 required that regulations be issued by the Federal Reserve and the Department of the Treasury within 270 days of the passage of the Act.
In October, 2007, these agencies issued a “Notice of Proposed Rulemaking”, which effectively tabled draft UIGEA regulations for public comment. The Bush administration had previously adopted the position that it would not finalize any rule subsequent to November 1, 2008. This last-minute rulemaking that binds the hands of an incoming administration is commonly termed the midnight drop. November 12, 2008, and came into effect on January 19, 2009, the day before the Obama administration took office. Compliance was not required until December 1, 2009, in order to give the “non-exempt participants” an opportunity to implement the necessary safeguards and procedures. According to the overview posted on the FDIC website, the act prohibits gambling businesses from “restricted transactions”. Restricted transactions involve gambling businesses when they knowingly accept payments from another person in a bet or wager on the internet. The Act begins with Congress’s findings and purpose.
Findings include a recommendation from the National Gambling Impact Study Commission. One of the controversial findings asserted in the opening of the bill is the assertion that Internet gambling is a growing problem for banks and credit card companies. This section outlines definitions of gambling terms to be used throughout the act. The Act defines a bet or wager to include risking something of value on the outcome of a contest, sports event, “or a game subject to chance. The “game subject to chance” restriction is designed to include Internet poker in the act. The bill states “o person engaged in the business of betting or wagering may knowingly accept” any money transfers in any way from a person participating in unlawful Internet gambling. This includes credit cards, electronic fund transfers, and even paper checks.
But the restriction on transfers is limited to Internet gambling businesses, not mere players. It also would not cover payment processors or ISPs, even under a theory of aiding and abetting. Under section 5364, Federal regulators have 270 days from the date this bill is signed into law to come up with regulations to identify and block money transactions to gambling sites. The regulations will require everyone connected with a “designated payment system” to i. The Act allows the federal regulators to exempt transactions where it would be impractical to require identifying and blocking. This obviously applies to paper checks. Since there is no way to regulate overseas payment processors, section 5365 of the Act allows the United States and state attorneys general to bring civil actions in federal court. The courts have the power to issue temporary restraining orders and preliminary and permanent injunctions to prevent restricted transactions.