US Banks Stress Anti-Online Gambling Will Burden Their Operations

US Bankers stressed that banning payments on gambling online will over-burden their operations. Independent Community Bankers of America or ICBA spokesmen said that the measure could greatly over-burden the nation's payment system and monitoring the payments made to gambling interests may be impossible.

The Independent Community Bankers of America has called the Congress to review and re-examine provisions in the Internet Gambling Prohibition and Enforcement Act (H.R. 4411). The House of Representatives has passed this bill that requires the bank and other financial institutions to assist in stopping the flow of gambling deposits to online gambling venues.

In a letter written by ICBA to Senate Banking Committee Chairman Richard Shelby and Senate Judiciary Chairman Arlen Specter, "ICBA recognizes the concerns that some of your colleagues have raised about Internet gambling. We urge Congress to recognize that the nation's banks have already taken on major responsibilities to help detect and prevent terrorist financing and illegal money laundering. Attempting to monitor and block gambling transactions, particularly given the limits of the current payment technology, could detract from those efforts."

The proposed law then creates an impossible compliance burden for "uncoded" transactions, which the letter goes on to protest. Payment Online is unlike credit card transactions that include a code that can identify the type of business receiving payment, uncoded transactions, electronic payments and personal checks doesn't provide these kinds of information.

Banks can easily block the transactions of the credit card but for an uncoded transactions like electronic payment banks cannot block the transaction.

ICBA's main concern now is that the law appears to threaten to subject banks and electronic payment processors to potential criminal liability for a routine processing of financial transactions - that is the core of their business operation. This could subject banks to inconsistent state and national standards.

In conclusion, the burden of regulation and compliance created by H.R. 4411 is substantial. It would require banks to identify and block transactions done electronically between bank customers and Internet gaming companies on a system not designed for this purpose.