The chairman of the House Financial Services Committee, Rep. Barney Frank, D-Mass., had asked the Treasury this week not to move ahead now, saying it would “burden the financial services industry at a time of economic crisis.”

The rule does not define “unlawful Internet gambling.” That has been an issue since Republicans pushed through the law that the new rule puts in place, by attaching it to a port security bill in 2006.

The law sought to curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. But the law did not offer a clear definition of Internet gambling, instead referring to existing federal and state laws, which themselves provoke differing interpretations.

Banks and other financial institutions complained they were being forced into a law enforcement role when Congress could not even define what conduct it was trying to prevent. Payments are difficult to track anyway and online gambling companies can disguise themselves with relative ease.

Franks committee passed a bill this year seeking to block the rule from taking effect and first defining what was illegal online gambling. The measure did not pass the House.

“The clock is ticking on President Bushs prohibitionist crusade against Internet gaming and that is clearly why these flawed regulations are being forced on the financial services industry at the very last minute,” Rep. Shelley Berkley, D-Nev., said in a statement.

Berkley, along with the rest of Nevadas House delegation and the states gambling industry, supports legislation that would require a study of Internet gambling and the impacts of regulating it.

U.S. bettors have been estimated to supply at least half the revenue of the $16 billion Internet gambling industry, which is largely hosted on overseas sites.

Source: iledw