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Banking Group Sees Protections In Internet Gambling Bill
Monday October 2nd, 2006 / 17h57
By Greg Edwards Of DOW JONES NEWSWIRES The Internet gambling legislation passed late last week by the U.S. Congress, which led to a major sell-off of U.K-based online gambling stocks Monday, remains a concern to the U.S. banking industry but is not as burdensome as feared.
"We got some language in the bill that looks like it protects the financial services industry," said Steve Verdier, director of congressional relations for the Independent Community Bankers of America, which represents almost 5,000 banks in the U.S. "It could have been a lot worse."
The legislation is designed to prohibit U.S. banks and credit card companies from processing payments for illegal online gambling. Financial services companies and the U.S. Chamber of Commerce had expressed concerns about the compliance burdens that would be imposed, such as tracking and blocking potentially millions of transactions.
Under the legislation as passed, "If you are acting as a normal bank, and you're not in some sort of conspiracy with a betting house, then you are not going to be held liable," Verdier said.
In addition, the legislation will be guided and enforced by regulations written by the Federal Reserve and the U.S. Treasury Department.
"If they find that the banks just don't have the technology to track and block these transactions, then we don't have to," Verdier said. "The Fed and Treasury are not supposed to ask us to do the impossible."
Still, Verdier said, "we will have to see how those regulations get written."
The legislation, attached to an unrelated port security bill, was approved by the U.S. House of Representatives Friday and by the U.S. Senate early Saturday. It is expected to be signed into law by President Bush.
Shares in U.K.-based betting companies, such as PartyGaming PLC (PRTY.LN), 888 Holdings PLC (888.LN) and Sportingbet PLC (SBT.LN), plunged Monday. The companies said they would suspend business from the U.S. if the legislation is enacted.
Monday October 2nd, 2006 / 17h57
By Greg Edwards Of DOW JONES NEWSWIRES The Internet gambling legislation passed late last week by the U.S. Congress, which led to a major sell-off of U.K-based online gambling stocks Monday, remains a concern to the U.S. banking industry but is not as burdensome as feared.
"We got some language in the bill that looks like it protects the financial services industry," said Steve Verdier, director of congressional relations for the Independent Community Bankers of America, which represents almost 5,000 banks in the U.S. "It could have been a lot worse."
The legislation is designed to prohibit U.S. banks and credit card companies from processing payments for illegal online gambling. Financial services companies and the U.S. Chamber of Commerce had expressed concerns about the compliance burdens that would be imposed, such as tracking and blocking potentially millions of transactions.
Under the legislation as passed, "If you are acting as a normal bank, and you're not in some sort of conspiracy with a betting house, then you are not going to be held liable," Verdier said.
In addition, the legislation will be guided and enforced by regulations written by the Federal Reserve and the U.S. Treasury Department.
"If they find that the banks just don't have the technology to track and block these transactions, then we don't have to," Verdier said. "The Fed and Treasury are not supposed to ask us to do the impossible."
Still, Verdier said, "we will have to see how those regulations get written."
The legislation, attached to an unrelated port security bill, was approved by the U.S. House of Representatives Friday and by the U.S. Senate early Saturday. It is expected to be signed into law by President Bush.
Shares in U.K.-based betting companies, such as PartyGaming PLC (PRTY.LN), 888 Holdings PLC (888.LN) and Sportingbet PLC (SBT.LN), plunged Monday. The companies said they would suspend business from the U.S. if the legislation is enacted.
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