Unlawful Internet Gambling Enforcement Act

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The Department of the Treasury and the Federal Reserve Board (Agencies) issued a joint final rule on December 18, 2008 to implement the Unlawful Internet Gambling Enforcement Act (UIGEA). The Act "prohibits any person engaged in the business of betting or wagering (as defined in the Act) from knowingly accepting payments in connection with the participation of another person in unlawful Internet gambling." The final rule requires a strengthened screening process at the time of account opening to deny commercial entities that may be acting as Internet casinos access to the payments system. It also requires that policies and procedures be implemented to prevent all debit and credit card payments to Internet casinos. It does not require that checks, ACH payments, or wire transactions related to Internet gambling be monitored or blocked. A six month reprieve on mandatory compliance with the Internet Gambling prohibition ends on June 1, 2010 when all banks must institute policies and procedures to block certain prohibited transactions.

Recent Developments
The Basics
Solutions 
Commentary

Recent Developments

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The Basics

Regulations/Legislation
  • New Legislation Proposed - HR 2266 and HR 2267(5/6/09)  
  • Final Rule Issued (11/18/08)
  • Proposed Rule Issued (10/4/07) Read ABA Comment Letter.
  • UIGEA was signed into law (10/13/06)
    The Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law as part of the Security and Accountability For Every Port Act of 2006.  The legislation recognized the difficulties that Federal law enforcement agencies had in enforcing illegal Internet gambling laws.  This law placed the burden on financial institutions to develop policies and procedures to prohibit transactions related to illegal Internet gambling.  Unfortunately, it did not provide definition of "illegal Internet gambling" making it difficult to know which payments would be subject to the law.

Guidance

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Solutions

Commentary

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Questions?  For more information, contact Steve Kenneally.