PPA Releases Statement Regarding Failed Payment Systems Protection Act

As most internet poker fans have heard by now, the House Financial Services Committee failed to pass H.R. 5767, the “Payment Systems Protection Act,” last week.  Representatives Barney Frank and Ron Paul had introduced the bill, which sought to block the implementation of UIGEA regulations. 

Frank and Paul believed, as many others do, that the regulations would be nearly impossible to enforce, as the UIGEA does not clearly define what constitutes an “illegal gaming transaction.”  

“These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions…” said Rep. Frank.  “...and while I do disagree with the underlying objective of the Act, I believe that even those who agree with it ought to be concerned about the regulations’ impact.” 

In order to make H.R. 5767 more favorable to potential opponents, Rep. Peter King proposed an amendment, which, rather than simply blocking the regulations, would require clarification of the UIGEA in order to make it workable. 

Unfortunately, the vote for the bill ended in a 32-32 tie, meaning that it was not passed. 

Former Senator Alfonse D’Amato, chairman of the Poker Players Alliance penned the following statement on the disappointing vote:

The PPA is surprised that the Financial Services Committee today failed to clarify what constitutes ‘unlawful Internet gambling’ under the Unlawful Internet Gambling Enforcement Act (UIGEA). The King Amendment would have required a separate formal rulemaking with an administrative law judge to determine the definition of unlawful Internet gambling.

The Federal Reserve, Department of Treasury and the banking industry have all testified before Congress that the lack of a definition of ‘unlawful Internet gambling’ makes it extremely difficult if not impossible to enforce this law and would result in a broader review and denial of financial transactions because they could possibly be deemed unlawful under UIGEA.

It is disappointing to realize that opponents of this legislation still do not truly understand the intent of the bill. It was clear today that those who oppose this bill chose to focus on emotional and non-germane issues, such as the harmful impact of gambling on children, instead of on the merits of the bill itself.

As it stands, UIGEA is a completely unworkable and unenforceable bill that would do little to address the main concerns of its sponsors – namely, protecting underage and compulsive gamblers as well as cracking down on money laundering. To truly address these issues, the PPA firmly believes that Congress should implement thoughtful and effective regulation of the online gambling industry as opposed to outright prohibitions, which history has shown do not work.

Unfortunately, debate over the morality of gambling trumped debate on the fact that UIGEA is completely ineffective and unenforceable.