23 Aug 2006
The recent anti-online gambling legislation passed by the US Congress is causing opposition in many quarters. In particular, the Independent Bankers of America (ICBA) has again appealed to the House to re-consider certain elements of the Internet Gambling Prohibition and Enforcement Act, which demands that banks and other financial bodies help to stop the deposits made in online gambling from reaching the online gambling sites. The ICBA claims that not only is it almost impossible to monitor these gambling deposits, but this requirement would add too much of a burden on the nation’s payment system.
Although the ICBA understands some of the US government’s concerns regarding online gambling, the banks are already overburdened with assisting in terrorist detection and illegal money laundering. Adding the monitoring and blocking of online gambling to these burdens could cause the banks to become less effective. It is common in online gambling to place bets through electronic payments and personal checks. These kinds of “encoded transactions” are extremely difficult to trace because they do not identify the type of business - in this case online casinos- receiving payment.
The ICBA is also worried that trying to block internet gambling transactions will threaten their routine processing of transactions. In addition, each state might have different standards for monitoring online gambling transactions, making for inconsistent standards. The banks, for all these reasons, prefer to focus their monitoring efforts not on internet gambling transactions, but on cases where national security is at risk. Finally, the banks claim that their system is not appropriate for the identification and blocking of internet gaming transactions.
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