Steve Kenneally, Vice President of the American Bankers Association, recently gave an interview where he spoke out against UIGEA. In the interview, he called the law ineffective and a costly piece of legislation.
He stated that the banks will be able to enforce the law in most cases, but it will take time to implement. He went on to state that there are certain types of transactions that the banks will not be able to stop. One example would be wire transfers. Another would be if the player would write a check to the gambling site. Since the check would be in the name of the holding company, the bank would have no idea if the holding is involved in online gambling, and thus would not stop the transaction.
Another problem would be if overzealous bankers erred on the side of caution and stopped legitimate transactions, ie: the buying of state lottery tickets.
He further stated that the costs involved with the enforcement of UIGEA will be high and that the banks cannot bear those costs themselves. So the costs would be passed on across the board to all, even people who have no interest in online gambling.
Kenneally stated that the only real solution is the legalization and regulation of online gaming. And with the June 1st deadline for the implementation of UIGEA, and no new hearing date on Barney Frank’s bills, the banks, and everybody else, are just going to have to be ready for June 1.