Saturday, April 05, 2008

UIGEA Hearing

On April Second, the Financial Services Committee of the US House of Representatives held a hearing on UIGEA. I will deal with the substance a little later. Right now I want to deal with the subtext, or as I like to call it, the pretext of the hearing.

The UIGEA was passed in 2006. Today it is 2008. Both of these years are election years. Senator Bill Frist snuck the UIGEA into the Safe Ports Act because he knew that no one would vote against safe ports, especially in an election year. And he was right. It passed and President Bush signed it.

UIGEA is not before the Committee because Congress is serious about either changing or repealing it. It is before the Committee because politician want other politicians to be on the record. This way they can use the record to bash their opponents over the head with it in the elections this fall. I don't think that Congress will do anything about UIGEA (if they do anything at all) before the Fall of 2009.

With that said, on to the "substance": UIGEA overburdens banks with regulations. It is vaguely worded, and therefore hard to interpret. The cost to financial companies to comply would be "prohibitive", but hard to calculate the exact amount because of UIGEA's vague wording. It is limited in how it can combat "illegal internet gambling" and does not define exactly what "illegal internet gambling" is.

My take: Could UIGEA be used to stop purchases of goods and services via the internet? According to my mother-in-law it could. She views purchasing anything over the internet as a gamble.

Until they sort all this out sometime in 2009 or 2010,

Enjoy the Pokery Goodness!

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