Wednesday, October 04, 2006

THE costs of policing a new US internet gambling ban for banks and credit
card companies will be determined by regulators in the coming months,
industry officials said. Government officials are expected to propose a
"coding-and-blocking" system that will identify and stop payment to online
gambling sites, experts said. Many banks and credit card companies already
voluntarily block internet gambling transactions using such a system. The
Treasury Department and Federal Reserve Board have nine months to draft
regulations after the new law, included in a package of port security
measures passed by Congress and expected to be signed into law by President
George W. Bush. US banks and credit card companies are optimistic that
officials will prepare a workable system. "If the Treasury (department) and
Fed can come up with reasonable rules here, it shouldn't be that bad,"
Oliver Ireland, a lawyer who works with several financial services payment
providers, including Visa, said. "The way they built (the new law), it gives
us a chance to work with the regulators in a constructive way to come up
with a system," Greg Mesack, director of government relations for industry
trade group America's Community Bankers said.

British-based gaming companies such as Sportingbet, PartyGaming Plc and 888
Holdings Plc said on Monday they would likely pull out of the US market,
their biggest source of revenue, and their stocks plunged.

Some banking industry officials had worried that the new law would make them
responsible for blocking payments by check as well as credit card payments -
a requirement they had said would be unworkable.

But those concerns were allayed when lawmakers agreed to a provision
allowing the Treasury and the Fed to exempt checks from the requirement.

Experts said the system would not be fool-proof, but would bar the vast
majority of bettors.

"I suspect some smart enterprising person out there will find a way to (get
around) it. But for your average person who wants to get out there and bet
on college football, you're not going to do it," one lobbyist said.