|After weeks of speculation, Democratic Congressman Barney Frank has today introduced the Internet Gambling Regulation and Enforcement Act of 2007 that could create an exemption to the UIGEA for properly licensed operators.|
According to an official press release, “The Act establishes a federal regulatory and enforcement framework to license companies to accept bets and wagers online from individuals in the US, to the extent permitted by individual states, Indian tribes and sport leagues. All such licenses would include protections against underage gambling, compulsive gambling, money laundering and fraud.”
Following the introduction of the bill, Mr Frank explained, “The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone.”
The proposed legislation would institute practical and enforceable standards to bring transparency to Internet gambling to provide appropriate consumer protection.
The US Financial Services Committee will hold a hearing entitled, “Can Internet gambling be regulated to protect consumers and the payments system?” at a date to be determined in June, 2007.
As part of today’s release, was a Q&A covering the new bill, which included questions provided exclusively by iGaming Business. The full interview will be featured in the forthcoming magazine. Below is a sample from the interview:
How will the government ensure that the proper consumer protections are put in place?
No applicant would receive a license unless the following requirements with respect to any Internet bet or wager, at a minimum, are met:
• Safeguards to ensure the individual placing the bet or wager is 18 years of age or older
• Safeguards to combat fraud and money laundering and compulsive gambling
• Mechanisms to ensure all appropriate taxes and fees are collected from individuals and the licensees
• Safeguards to ensure that the individual placing the bet or wager is physically located in a jurisdiction that permits that form of Internet gambling
How does the bill protect consumers?
The framework set forth in the bill would for the first time effectively regulate Internet gambling, thus making it possible to address underage and compulsive gambling, neither of which are prevented under prohibition regimes. Regulation combined with proven technology would establish a system of effective controls to block children and compulsive gamblers from gambling.
How can restrictions against underage Internet gambling be enforced?
Existing technology can enforce requirements that licensed Internet gambling operators restrict minors’ access to Internet gambling. For example, when registering at a gambling site, the customer would be required to provide a range of information including name, address, date of birth, telephone number and details of an identity document, such as a driver’s license or social security number. This information would then be passed on to the Payment Service Provider (PSP) and run through the Know Your Customer (KYC) system to confirm that the data being provided matches against several separate sources of information and is in fact accurate. The operators may also have KYC systems in place.