|In America, the Financial Services Round Table, an expert body representing many top banks and financial services companies, has warned that regulations being drafted to enforce the Unlawful Internet Gambling Enforcement Act (UIGEA) will present major compliance obstacles unless the Bush administration clarifies its conflicting views on online betting.|
The group was responding to a request from the US Department of Treasury for opinions on its proposed regulations, which are designed to disrupt financial transactions with online gambling companies in sectors not exempted by American state and Federal legislation.
The Financial Times newspaper reported that the experts stated they were ‘very concerned’ that adoption of the rules could impose ‘significant’ and costly compliance burdens on banks.
'The statute and the proposed rule expand the role of financial institutions to police laws that are more appropriate for law enforcement agencies,' said the group.
At the centre of the concerns raised by the body is the fact that it is far from clear whether banks would also have to block payments from US-based gambling sites, including websites that take bets on horseracing over the Internet.
The Justice Department has long held the view that online betting within the US on horseracing is illegal. However, established horseracing websites have never been prosecuted and online operations are growing with the industry maintaining that state laws allowing wagers on horses trump Federal laws.
The giant Bank of America said that the Government should provide a list of specific entities with who banks are forbidden to take payments from in the absence of definitions as to what is legal.
'Without a definition, financial institutions will be forced to block legitimate transactions in order to avoid the possibility of permitting an illegal transaction,' read a statement from the Bank of America.