US Treasury Releases Proposed UIGEA Enforcement Rules

The US Treasury and the Board of Governors of the Federal Reserve System have released proposed rules to implement provisions of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

The proposed rules will designate certain payment systems that could be used in connection with online gambling and require participants in those designated payment systems to establish policies and procedures "reasonably designed to identify and block" transactions in connection with online gambling.

Certain participants are exempt from the requirements to establish any policies and procedures because the Treasury believes it will not be reasonably practical for them to do so. The Treasury is proposing that participants in the automated clearing house systems, check collection systems, and wire transfer systems, except for the participants that deal directly with customers in the online gambling business, are exempt from any requirements.

The UIGEA was enacted into law last year with a 270-day "grace period" which has expired. The US Treasury and Board of Governors of the Federal Reserve System will be accepting comments from the public on their proposed rules until December 12, 2007. The final regulations will take effect six months after the joint final rules are published.

The proposed UIGEA implementation rule can be found here: http://www.ustreas.gov/press/releases/reports/noticeofproposedrule.pdf

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