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Unlawful Internet Gambling Enforcement Act
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
- House Panel Approves Internet Gambling Bill (7/30/10)
The House Financial Services Committee approved by a 41-22 vote a bill (H.R. 2267) that would create a licensing system for online gambling. ABA noted in a memo to the panel that the legislation "could force lenders to assume liability for the actions of others when banks are following all of the rules." The committee adopted a manager's amendment to the bill that would exclude financial-services providers from liability "unless such provider has knowledge that the specific financial activities or transactions are conducted in violation" of the act. The panel also adopted Rep. John Campbell's (R-Calif.) amendment that, among other things, would require the creation of a federal list of illegal gambling sites. ABA will continue to follow the legislation closely during the legislative process and work to prevent any new burdens from being imposed on banks. - UIGEA Exam Guidance (6/30/10)
The FDIC and the other federal banking, thrift and credit union regulatory agencies issued guidance and examination procedures on the Unlawful Internet Gambling Enforcement Act. - Internet Gambling Exam Procedures Issued (5/21/10)
- ABA Staff Analysis: Regulators Extend Compliance Deadline to June 1, 2010
(11/30/09)
- ABA Letter to Secretary Geithner and Chairman Bernanke re: Delaying Reg GG Implementation (11/4/09)
- ABA Staff Analysis: Providing Timely Notice to Commercial Account Holders (10/28/09)
- ABA Staff Analysis: UIGEA Compliance Policy Drafting Assistance (10/28/09)
- Bipartisan Group Sends Letter to Bernanke, Geithner Seeking Delay in UIGEA rule Implementation (10/2/09)
- ABA Staff Analysis: The Absence of Card Network Written Statement or Notice(10/1/09)
- Four Keys to UIGEA Compliance, ABA Bank Compliance magazine, July/August 2009
- Compliance Overview (5/28/09)
- New Legislation Proposed - HR 2266 and HR 2267(5/6/09)
- UIGEA Final Rule Questions and Answers(5/28/09)
- Final Rule Issued (11/18/08)
The Basics
Regulations/Legislation
- New Legislation Proposed (5/6/09)
- Final Rule Issued (11/18/08)
- Proposed Rule Issued (10/1/07)
- ABA Comment (12/12/07)
- 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
- ABA Staff Analysis: Regulators Extend Compliance Deadline to June 1, 2010 (11/30/09)
- ABA Staff Analysis: Providing Timely Notice to Commercial Account Holders (10/28/09)
- ABA Staff Analysis: UIGEA Compliance Policy Drafting Assistance (10/28/09)
- ABA Staff Analysis: The Absence of Card Network Written Statement or Notice(10/1/09)
- UIGEA Final Rule Questions and Answers (5/28/09)
- Compliance Overview (5/28/09)
- Summary of the Final Rule Requirements for Financial Institutions
- UIGEA Final Rule versus Proposed Rule Comparison Table (11/12/08)
Solutions
Commentary
Questions? For more information, contact Steve Kenneally.
