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by: Gene Koprowski. Gambling News.
A leading congressional Democrat yesterday asked the Bush administration to not implement Internet gambling rules on banks before it leaves office on January 20.
 
 
"I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations implementing the Unlawful Internet Gambling Enforcement Act," House Financial Committee Chairman Barney Frank, a Massachusetts Democrat, said in a letter to U.S. Treasury Secretary Henry Paulson. "This midnight rulemaking will tie the hands of the new Administration, burden the financial services industry at a time of economic crisis, and contradict the stated intent of the Financial Services Committee."

The Treasury Department and the Federal Reserve are required to issue new rules on Internet gambling under a bill Congress passed 2006, when Republicans were still in control of the House of Representatives and the Senate.
That legislation cost European Internet gambling companies billions in lost market value, prevented companies from accepting payments in connection with Internet gambling.

The bill relied on existing Federal and state laws to define what was legal, and what was not, for Internet gambling. The measure also still allowed any online horserace betting permissible under the Interstate Horseracing Act of 1978.
That has created confusion. At a hearing in April both Treasury and Federal Reserve officials told Frank's committee they were "struggling" to determine what type of online gambling was illegal under the bill.

"The challenge we have is interpreting federal laws that Congress itself isn't sure what they mean," said Louise Roseman, the Fed's director of reserve bank operations and payment systems.

The House Financial Services Committee developed legislation in September that would block implementation of the new rules, but neither the House nor the Senate has followed up with a vote on the measure.

What's more, though Frank is a committee chairman, he is known as something of a loose cannon, and his views may not result in instant action at the White House. Right before the Nov. 4 election, Frank, for example, called for an across the board, 25 percent cut in the U.S. defense budget, an irresponsible move, at a time the nation is in the midst of two wars, many observed.
 
Thus, in response to Frank's letter to Paulson, a Treasury spokeswoman, was quite cautious. She said the Treasury and the Fed were working together "to gather considerable public comment and complete these regulations as directed by Congress."

While all this is happening, the European Commission has been investigating whether the U.S. Justice Department was "unfairly singling out"  EU Internet gambling companies for enforcement.

An EU team that visited Washington in September to investigate the issue, is expected to release its report by the end of the November. Depending on what it says, that could set the stage for the European Commission to bring action against the United States at the World Trade Organization.


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