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Bank Failure, Offshore Oil Drilling and Online Gambling

Daily Update

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Bank Failure, Offshore Oil Drilling and Online Gambling

The multi-billion dollar failure of IndyMac bank in California fuels calls for greater government regulation of financial institutions.

President Bush lifts the White House ban on offshore oil and gas exploration.

European Union trade officials challenge the U.S. ban on online gambling.

1. BUSINESS

The multi-billion dollar failure of IndyMac bank in California fuels calls for greater government regulation of financial institutions.

CEI Expert Available to Comment: Center for Entrepreneurship Director John Berlau on the problem with the Treasury Department’s proposed rules on finance regulation:

“To propose, as the [Treasury Department’s plan] does, that the Federal Reserve can examine any business that poses a threat to the financial system, would result in an unacceptably broad jurisdiction. Many small entrepreneurs may suddenly find themselves at the Fed's mercy. Federal statutes and rules have already stretched the definition of ‘financial institution’ to include such diverse businesses as jewelry stores, car dealers, and travel agencies.”

 

2. ENERGY

President Bush lifts the White House ban on offshore oil and gas exploration.

CEI Expert Available to Comment: Director of Energy Policy Myron Ebell on why it is now Congress’ turn to act:

“For too long the federal government has tied the hands of state governments that wish to permit oil and natural gas leasing in their adjacent offshore zones. Congress should remove the moratoria on offshore gas production and share the federal royalties with the States that decide to allow offshore production, just as they share the royalties from production on federal lands with the States.”

 

3. TRADE

European Union trade officials challenge the U.S. ban on online gambling.

CEI Expert Available to Comment: Senior Fellow Eli Lehrer on the problems U.S. gambling laws are creating internationally:

“…some European and Caribbean Internet gaming operators have already faced Wire Act prosecution for engaging in Internet gambling transactions before the Unlawful Internet Gaming Enforcement Act (UIGEA) went into effect in 2006. On the other hand, U.S.-based horse betting websites operate freely. In other words, the Department of Justice appears to have selectively prosecuted non-U.S. operators in violation of World Trade Organization rules that bar discriminatory treatment. Even more interestingly, several of the Internet gaming operators under investigation -- 888.com and partygaming.com -- actually pulled out of the U.S. market as soon as UIGEA went into force. Already, the EU has begun the process of creating a formal Trade Barriers Regulation complaint against the U.S. government.”