Committee Chairman Barney Frank, D-Mass.; ranking member Ron Paul, R-Texas; and committee members Luis V. Gutierrez, D-Ill., and Peter King, R-N.Y., sent a letter to all members of Congress seeking support. They said that representatives from the regulatory agencies have admitted there are "substantial problems" with creating regulations under the Unlawful Internet Gambling Enforcement Act of 2006 without hindering payment systems.
The UIGEA requires civil and/or criminal penalties for banks, credit card companies, and others who process Americans' payments to gambling Web sites. Supporters say it would prevent underage and compulsive gambling. Opponents argue that it violates U.S. citizens' constitutional rights and sets a dangerous precedent for Web commerce by criminalizing the transfer of funds if the end result is illegal.
Frank and Paul introduced H.R. 5767 earlier this month. The bill would stop the Department of the Treasury and the Federal Reserve System from proposing, prescribing, or implementing regulations required by UIGEA. Frank, Paul, Gutierrez, and King also asked the Treasury and Federal Reserve System to stop creating and enforcing regulations related to UIGEA.
"Given the many other priorities that are pending at your agencies ... we believe it would be imprudent for you to devote additional agency resources to this Sisyphean task," they explained in letters to the leaders of the Treasury and Federal Reserve.
Representatives from the Credit Union National Association, Financial Services Roundtable, American Bankers Association, and Wells Fargo also testified earlier this month about the burden they would face using "ambiguous regulations" to determine which customer activities are legal and which are not.
Frank has also proposed legislation that would require licensed Internet gambling operators to prevent underage and compulsive gambling, while protecting the integrity of financial transactions. A companion bill from U.S. Rep. Jim McDermott, D-Wash., would ensure tax collection on regulated Internet gambling.
PricewaterhouseCoopers predicted that regulated Internet gambling could generate between $8.7 billion and $42.8 billion in federal tax revenue during the first 10 years.
Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative, praised the House efforts.
"These bipartisan congressional leaders understand that the proposed regulations can't work," he said in a statement. "Their legislation would relieve U.S. financial services companies from the burden of policing the Internet and implementing a ban on Internet gambling that is doomed to fail. U.S. financial services companies should be focusing their undivided attention on the economy, not trying to stop people from exercising their freedom to use the Internet to play poker, bet on horses, or engage in other types of gambling activities."