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Wednesday November 14, 3:12 pm ET
U.S. Treasury Department Outlines Exemptions on Internet Gambling Ban
WASHINGTON (AP) -- The Treasury Department and the Federal Reserve continue to finalize a new rule that would put the onus on banks to help crack down on online gambling by U.S. citizens, a Treasury official said Wednesday.
In prepared remarks, Deputy Assistant Secretary Valerie Abend said banking regulators are focusing their efforts on banks that do business with gambling companies, as well as the interaction between U.S. banks and foreign banks that may be tied to online gambling.
Legislation passed by U.S. lawmakers last year required Treasury and the Fed to enact regulations aimed at preventing the flow of funds from gamblers to Internet gambling sites.
Included in that legislation were exemptions for certain financial institutions where it is "not reasonably practical" to prevent illegal Internet gambling. Abend said such exemptions would generally extend to the gambler's bank, but not banks that do businesses with firms that offer illegal gambling.
"In the case of checks, the check collection system is highly automated and it is not reasonably practical for the gambler's bank to know whether a check presented to it for payment involves unlawful Internet gambling," Abend said.
Conversely, she said, a gambling business' bank or the first U.S. bank to receive a check under the proposed rule would be required to have policies and procedures in place to stop the processing of a check.
A public comment period on the proposed rule is scheduled to close Dec. 12. Abend said Treasury expects a large number of responses and would provide analysis and reasons for any decisions based on the comments received.
U.S. Treasury Department Outlines Exemptions on Internet Gambling Ban
WASHINGTON (AP) -- The Treasury Department and the Federal Reserve continue to finalize a new rule that would put the onus on banks to help crack down on online gambling by U.S. citizens, a Treasury official said Wednesday.
In prepared remarks, Deputy Assistant Secretary Valerie Abend said banking regulators are focusing their efforts on banks that do business with gambling companies, as well as the interaction between U.S. banks and foreign banks that may be tied to online gambling.
Legislation passed by U.S. lawmakers last year required Treasury and the Fed to enact regulations aimed at preventing the flow of funds from gamblers to Internet gambling sites.
Included in that legislation were exemptions for certain financial institutions where it is "not reasonably practical" to prevent illegal Internet gambling. Abend said such exemptions would generally extend to the gambler's bank, but not banks that do businesses with firms that offer illegal gambling.
"In the case of checks, the check collection system is highly automated and it is not reasonably practical for the gambler's bank to know whether a check presented to it for payment involves unlawful Internet gambling," Abend said.
Conversely, she said, a gambling business' bank or the first U.S. bank to receive a check under the proposed rule would be required to have policies and procedures in place to stop the processing of a check.
A public comment period on the proposed rule is scheduled to close Dec. 12. Abend said Treasury expects a large number of responses and would provide analysis and reasons for any decisions based on the comments received.
