UIGEA criticised as- oo ambiguous to work

The Congressional hearings into the viability of the existing Unlawful Internet Gambling Enforcement Act (UIGEA) this last April 2 have received a huge amount of media coverage as delegates heard reasons why the law is, in fact, too ambiguous to effectively provide regulations for.

UIGEA has been in effect now since late 2006 and has wreaked havoc in the online bingo industry with many online bingo games operators and online bingo halls having to exit the US market to avoid possible prosecution. However, the actual regulations which are meant to govern UIGEA’s use by US authorities are not in place with a preliminary draft now undergoing public consultation.

During the April 2 hearings, Federal Reserve and Treasury officials gave evidence that they were struggling to craft the UIGEA rules because federal law is unclear about what type of gambling is illegal online.

UIGEA seeks to disrupt financial transactions between US-based online players and non-US online gaming companies. There have already been a number of high profile casualties due to UIGEA prosecutions including well known e-wallet Neteller that was forced into having to pay a substantial fine to avoid prosecution. Many online gaming companies, including those involved in bingo online, simply chose to exit the US market to avoid similar legal issues.

During the hearings Congressman Luis Gutierrez, Chairman of the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, said: "One of the most common complaints is that the proposed rules fail to sufficiently define key terms, leaving financial institutions with significant compliance difficulties." He added: "For example, the regulation fails to adequately define what constitutes “unlawful Internet gambling” or a "restricted transaction," yet requires the financial institutions to make a determination on their own about what is lawful or unlawful.

"Consumers will be placed at risk of having lawful transactions blocked. It is easy to see how these regulations, if implemented in their current form, could wreak havoc on electronic commerce in the U.S."

Written by Bingo Lady