St. John’s---Oct. 3, 2006---The local Internet gaming industry faces a crippling challenge as the United States Congress has passed legislation to ban its financial institutions from making payments to offshore gaming sites.

The bill will make it illegal for banks and other financial institutions, like credit card companies, to process and transmit payments for transactions with online gaming companies. It will effectively prohibit gamblers from using credit cards, cheques and electronic transfers to settle online wagers.

The legislation, passed in Congress on Saturday, will come into force when President George W. Bush signs it into law.

The measure has been pending for several months and Senate Majority Leader Bill Frist, who is expected to run in the 2008 presidential elections, had said that he would make it a priority to see the restrictions passed before the Senate recessed to campaign for its November elections.

The measure was attached to an unrelated bill which provided funding for US port security. An earlier effort to pin the gaming legislation to a military bill was foiled when there were widespread protests that the military bill was too unrelated.

The passage of the legislation is likely to have a dramatic impact on the industry, which has been valued at US$12 billion. While most Internet gaming companies are based outside of the US, American clients make up the majority of its clients.

Locally based or regulated gaming companies have monitored the recent crackdown by US authorities carefully and Antiguan regulators have repeatedly expressed concern that the growing industry, most of which depends heavily on the US market, was being sabotaged by the US government.

The nature of the Internet makes it difficult to block clients from accessing gaming Web sites and their services, but the present bill is expected to place responsibility of policing the industry on the financial institutions, who must check to ensure that none of their transactions are gaming payments.

Once it is finalised, the US Federal Reserve and US Department of Justice are expected to issue regulations to financial institutions within nine months establishing policies and procedures for the implementation of the restrictions.

The new legislation makes provisions for fines and imprisonment for violations. Certain exemptions have been made, including one for online gambling on horse racing.

It also throws into further question the practical value of a World Trade Organisation (WTO) ruling last year that US restrictions on the operation of Antiguan and Barbudan gaming companies were in conflict with its international trade agreements.

A panel is currently reviewing the USA’s claims that it is already in compliance with the WTO agreements.

Meanwhile, the former chairman of gaming company Sportingbet Peter Dicks has been told that he is free to return to Britain after New York Governor George Pataki decided that he could not, legally, sign an order to extradite Dicks from New York State to Louisiana.

Source: antiguasun.com
by Patricia Campbell