In breaking news out of Washington, D.C., Congressman Barney Frank (D-Mass.) introduced the Payments System Protection Act of 2008 on Thursday, according to a statement released by the Safe and Secure Internet Gambling Initiative. The bill requires the U.S. Treasury and Federal Reserve to work together with the Department of Justice to determine what activities are and are not legal under the Unlawful Internet Gambling Enforcement Act (UIGEA). The news comes about ten weeks after a similar measure proposed by Frank and Congressman Ron Paul (R-Tex.) was defeated in the House Financial Services Committee.

A press release distributed by the Safe and Secure Internet Gambling Initiative late Thursday afternoon noted that the bill called for an “Administrative Law Judge” to be appointed. He or she would be ultimately charged with identifying which activities are legal and which aren’t under the UIGEA, which was passed in late 2006. The UIGEA was ushered through Congress by former Senate Majority Leader Bill Frist (R-Tenn.). It was ultimately attached to the SAFE Port Act, which passed the House 409-2 and passed the Senate by unanimous consent. In the House, several lawmakers spoke out about the attachment of an online gambling provision, most notably Shelley Berkley (D-Nev.), who said that while she did vote for the SAFE Port Act, she was disappointed that the UIGEA was also a provision in it.

Safe and Secure Internet Gambling Initiative Spokesman Jeff Sandman commented,

Chairman Frank is doing the right thing by saying it is unfair to burden U.S. financial service companies with the job of the Internet gambling police at a time when their undivided attention ought to be on the economy. The reality is that the UIGEA is dangerous to the payments system and unlikely to stop anyone from using the Internet to play poker, bet on horses, or engage in other types of wagering.

It’s the latest attempt by Frank to undo the UIGEA. In April, he authored HR 5767, which would have prohibited the Treasury and Federal Reserve of the United States from enforcing the regulations of the UIGEA. Also active on HR 5767 was Republican Presidential candidate Ron Paul (R-Tex.), who served as a voice to unite the efforts on both sides of the aisle in the House to pass HR 5767. However, the bill was defeated, largely along party lines, in the House Financial Services Committee in June. Leading the opposition was Congressman Spencer Bachus (R-Ala.), who erroneously quoted a study by McGill University that linked internet gambling to suicide. McGill officials claimed no such study ever took place.

At the time, Frank and Paul authored a letter to Treasury Secretary Henry Paulson that stated,

The regulations, like the underlying legislation, fail to define the term ‘unlawful internet gambling,’ leaving it to each financial institution to reconcile conflicting state and federal laws, court decisions, and inconsistent Department of Justice determinations when determining whether to process a transaction.

At a Financial Services Committee Hearing in April, representatives from Wells Fargo, the U.S. Treasury, and other financial institutions testified that enforcing the UIGEA was nearly impossible given the volume of transactions processed daily in the United States and the lack of clarification of the words “unlawful internet gambling.”

It was unclear at press time whether the new Payments System Protection Act of 2008 would be numbered separately from its predecessor, HR 5767.

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