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Congress’s Online Gambling Ban – Burden Without Benefit, Says Study

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Congress’s Online Gambling Ban – Burden Without Benefit, Says Study

Congress to Investigate Threat to U.S. Banking System

Conntact:

Richard Morrison,
202.331.2273

Washington,
D.C., March 27, 2008—The current laws
about Internet gambling have had damaging unintended consequences far beyond their
intended target, according to a study published today by the Competitive
Enterprise Institute.

The
Unlawful Internet Gambling Enforcement Act (UIGEA), passed in October of 2006,
has little to do with gambling itself, but is actually a wide-ranging
regulatory mandate on banks, credit unions, credit card companies, wire
transfer services, and even brokerages. The law forces financial institutions to
cut off business with any entity that could possibly be engaged in online
gambling transactions.

“The
Act is unlikely to stop Internet gambling and could even threaten the stable,
smooth operation of America’s
banking system,” said Senior Fellow Eli Lehrer and author of the
study Time
to Fold the Unlawful Internet Gambling Enforcement Act
. “UIGEA and
its currently proposed enabling regulations will undermine the financial
privacy of all Americans and reduce the security of their bank accounts. In
short, it makes almost no financial, social, or economic sense.”

Some members of Congress are at least aware of the problems
with gambling ban. On April 2nd, the House Committee on Financial
Services is scheduled to hold a hearing titled “Proposed UIGEA Regulations:
Burden without Benefit?” to detail what has gone wrong with its implementation
and how to fix it. Ideally, however, they would go much farther.

“Even
before it considers proposals for the regulation of online gambling, Congress
should consider an outright repeal of the Unlawful Internet Gambling
Enforcement Act,” said Lehrer. “The law has very little to do with gambling and
serves as a poorly thought-out banking regulation fraught with potentially
perverse incentives. Quite simply, it is a bad law. Repealing it makes sense.”