Community Bankers Fighting Against Online Gambling Bill

The banking association is the highest-profile group to date that has come out against the Internet gaming ban, joining the San Francisco-based Poker Players Alliance, which has 100,000 members.

The lobbying group represents 5,000 community banks all over the U.S., said that it would be difficult, if not impossible, for banks to monitor electronic payments from gamblers to the  Internet, because the wire transfers are not coded to show what type of business is doing the billing.

Other Responsibilities

"ICBA recognizes the concerns that some of your colleagues have raised about Internet gambling," a spokesman for ICBA said. "We urge Congress to recognize that the nation's banks have already taken on major responsibilities to help detect and prevent terrorist financing and illegal money laundering. Attempting to monitor and block gambling transactions, particularly given the limits of the current payment technology, could detract from those efforts."


A letter voicing these, and other, concerns, was presented to Senate Banking Committee Chairman Richard Shelby (R-Ala.) and Senate Judiciary Chairman Arlen Specter (R-Pa.). A copy of which was provided to Onlinecasinocrawler.com

The association said that smaller banks simply do not have the capability to stop gamblers from using paper-checks to move money into gambling accounts. The proposed law might require them to do so, however.

Although the Internet Gambling Prohibition and Enforcement Act (IGPEA) would require more  regulation of banks, the Federal Reserve and the Treasury Department would have to devise a way to make complying with the law not overly burdensome, said Rep. Jim Leach (R-Iowa), sponsor of the bill in the U.S. House of Representatives.

Constant Updates

Banks, if the law was passed, would need a continually updated lists of names of online casino operations to comply with the law, somewhat akin to what is done to monitor payments to alleged terrorist organizations and would-be drug dealers.

According to the ICBA, unlike credit card transactions, which include a code that identifies the type of business receiving payment, uncoded transactions -- electronic payments and personal checks -- don't provide this information. Though it's feasible to monitor and block certain types of credit card transactions, a bank can’t do so with completely “uncoded” transactions.
 

Another reason the ICBA opposes the bill is that the legislation will subject banks and electronic processors to criminal liability for routine processing of financial transactions – which today is their core business operation.


Lastly, the bill could make banks to have to comply inconsistent state and national standards, costing them more money to operate effectively.

The ICBA has been working to ensure that community banks - which through the USA Patriot Act and Bank Secrecy Act must confirm the identity of bank customers while documenting and reporting suspicious transactions - can continue to focus their resources where risks to national safety and financial soundness are greatest. “The burden of regulation and compliance created by H.R. 4411 is substantial, and if enacted, would require banks to identify and block transactions between bank customers and Internet gaming companies on a system not designed for this purpose,” said the ICBA spokesman.

The proposed law is frustrating not only to bankers, but to those involved in the industry of online gaming too.

"I wish they were just trying to regulate us or tax us,"  Michael Bolcerek, executive director of the Poker Players Alliance said, of the U.S. government.

© Copyright 2006 Online Casino Crawler This material may not be published, broadcast, rewritten, or redistributed.