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House committee approves Internet gambling legalization

WASHINGTON (7/29/10)—H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, will move on to the full house after the House Financial Services Committee approved the legislation by a 41 to 21 vote margin on Wednesday.

The legislation, which was introduced by committee head Barney Frank (D-Mass.), would allow the U.S. Treasury to license internet gambling operators and would permit approved operators to accept bets from U.S. citizens.

Both Credit Union National Association (CUNA) President/CEO Bill Cheney and Discovery FCU President/CEO Ed Williams, who testified on behalf of CUNA, have spoken on the good that the gambling legislation could do for credit unions that are currently mired in the compliance burdens of the Unlawful Internet Gaming Enforcement Act (UIGEA).

UIGEA, as currently constructed, requires credit unions and other financial institutions are required to establish and implement policies and procedures to identify and block restricted internet gambling transactions, or rely on those procedures established by the payments system. While many transactions that are made with illegal gambling operators are blocked, the UIGEA regulations do result in a large number of false positives, creating issues for both credit union members and credit unions.

H.R. 2267 would ease the compliance burdens by supplying a list of approved Internet gambling providers that financial institutions could use to help determine what transactions to validate. However, Cheney, in a letter sent to House members this week, also urged legislators to direct the Treasury and the Department of Justice to develop and maintain a list of illegal Internet gambling providers, as well as the list of licensed operators, to further reduce the compliance burden on credit unions and other financial institutions. It is not known when the gambling legislation will come up for debate or a full House vote.

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Unlawful Internet Gambling: Complying with the New Rule Audio Recording


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