Government delays new ban on Internet gambling

Nov 27, 2009 By MARTIN CRUTSINGER , AP Economics Writer

(AP) -- The Treasury Department and the Federal Reserve are giving U.S. financial institutions an additional six months to comply with regulations designed to ban Internet gambling.

The two agencies said Friday that the new rules, which were to take effect on Dec. 1, would be delayed until June 1 of next year.

A key Democratic opponent of the ban on online gambling praised the action and said it would give Congress time to overturn a law passed in 2006 when Republicans controlled Congress.

The delayed rules would curb online gambling by prohibiting from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers.

The financial industry complained that the new rules would be difficult to enforce because they did not offer a clear definition of what constitutes Internet gambling. They had sought a 12-month delay in implementing provisions of the Unlawful Internet Gambling Enforcement Act that Congress had passed in 2006.

The Bush administration issued regulations to enforce the law in November 2008 and had set Dec. 1, 2009, as the date financial institutions would have to begin complying.

However, in a joint notice Friday, Treasury and the Fed said that several members of Congress had sought a delay, arguing that there was considerable support for new legislation to clarify the current laws.

The two agencies said groups seeking a delay had provided sufficient reasons to justify a limited six-month postponement of the rules. Financial organizations including the American Bankers Association had sent the agencies letters supporting a petition filed by gambling industry associations seeking a delay.

House Financial Services Committee Chairman Barney Frank, D-Mass., praised Friday's announcement. He is sponsoring legislation that would roll back the 2006 law that bans financial institutions from handling transactions made to and from Internet gambling sites.

"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," Frank said in a statement.

Frank's legislation would allow the Treasury Department to license and regulate online gambling companies that service American customers. Frank argues that online gambling should be legal as a matter of personal liberty and that the federal government could collect increased tax revenues if Internet gambling is regulated.

In September, a U.S. appeals court in Philadelphia upheld the 2006 law, rejecting a challenge from an association of offshore bookies that the federal prohibition was too vague and violated privacy rights.

U.S. bettors have been estimated to supply at least half the revenue of the $16 billion Internet industry, which is largely hosted overseas.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: LinkedIn membership hits 300 million

add to favorites email to friend print save as pdf

Related Stories

Gambling bill moves to full House

May 26, 2006

In a 25-11 vote Thursday the House Judiciary Committee passed a bill banning gambling over state lines and Internet technologies.

Gambling industry pushes efforts to legalize online betting

May 13, 2009

Backed by a powerful House member, the online gambling industry is waging a campaign in Congress to legalize Internet betting, saying it will continue regardless of its legal status and can be regulated and taxed if not outlawed. ...

Group says poker winnings are frozen

Jun 10, 2009

(AP) -- An advocacy group for online poker said Tuesday that the federal government has frozen more than $30 million in the accounts of payment processors that handle the winnings of thousands of online poker players.

Recommended for you

LinkedIn membership hits 300 million

Apr 18, 2014

The career-focused social network LinkedIn announced Friday it has 300 million members, with more than half the total outside the United States.

Researchers uncover likely creator of Bitcoin

Apr 18, 2014

The primary author of the celebrated Bitcoin paper, and therefore probable creator of Bitcoin, is most likely Nick Szabo, a blogger and former George Washington University law professor, according to students ...

White House updating online privacy policy

Apr 18, 2014

A new Obama administration privacy policy out Friday explains how the government will gather the user data of online visitors to WhiteHouse.gov, mobile apps and social media sites. It also clarifies that ...

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...

A homemade solar lamp for developing countries

(Phys.org) —The solar lamp developed by the start-up LEDsafari is a more effective, safer, and less expensive form of illumination than the traditional oil lamp currently used by more than one billion people ...

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...

Filipino tests negative for Middle East virus

A Filipino nurse who tested positive for the Middle East virus has been found free of infection in a subsequent examination after he returned home, Philippine health officials said Saturday.

Egypt archaeologists find ancient writer's tomb

Egypt's minister of antiquities says a team of Spanish archaeologists has discovered two tombs in the southern part of the country, one of them belonging to a writer and containing a trove of artifacts including reed pens ...