The following is a brief "cliff note" version of the proposed regulations that the US Treasury released today.

This is not a legal interpretation but merly a brief synopsis of what we deemed important points of the 52 page report. Please view the entire document for complete and the most accurate information.

Update:  We will be getting first rights to an article written by I. Nelson Rose, Gambling Law Professor, shortly to get a more accurate and "lamens term" version of the proposed regulations.  Please stay tuned to the US poker updates section for the release of the article.

Important Points of the Regulations

• Commenting period will end on December 12, 2007 
• After the commenting period ends on Dec. 12 there is no set timeframe for the regulations to be reviewed and amended.
• The Agencies propose that the final regulations take effect six months after the joint final rules are published.  If I am reading this correctly, they want banks etc. to comply 6 months after they have viewed and taken the comments into consideration AND finished with final revisions to the regulations which has no specified length of time.  This would mean an absolute minimum of 8 and ½ months before regulations go into affect.
• The proposed rule does not attempt to further define gambling-related terms because the Act itself does not specify which gambling activities are legal or illegal and the Act does not require the Agencies to do so either.
• The proposed regulatory definition clarifies that an end-user customer of a financial transaction provider is not included in the definition of “participant."

Affected Transactions

• Automated clearing house systems; card systems (including credit, debit, and pre-paid cards or stored value products); check collection systems; money transmitting businesses (moneygram and western union etc.); and wire transfer systems
• “Unlawful Internet Gambling” transactions are still not defined but banks are informed to block these types of gambling transactions?
• MoneyGram and Western Union will be forced to block gambling transactions under these regulations.
• Ewallets are termed “money transmitting devices” such as click2pay, epassporte, ewalletxpress etc.  The problem here arises once again on what “unlawful gambling transactions” are and are expected to be forbidden.  Thus, epassporte only accepts poker related deposits so the question to rises whether it is illegal or not.
• Other “stored value” deposit methods such as pre-paid teleco companies like Nucharge, addfunds etc seem to be covered and listed to be illegal under “stored value products”.

Exempted Transactions

• Certain check collections, wire and ACH transactions are exempt except for those that have relationships with gambling sites

Monitoring

• The regulations state that intermediaries are supposed to “monitor” suspicious payment patterns, monitor gambling sites for use of their trademarks and payment solutions.  This will likely cut off the use of Moneygram and Western Union quite quickly.

Coding

• The regulations ask that certain coding for such deposit mechanisms as credit cards have separate coding for legal (horseracing bets) and illegal gambling transactions.

List of Gambling Sites?

• There was mention of creating a list of businesses known to be associated with gambling in the regulations for commenting but seemed too burdensome, unfeasible to manage and too costly to realistically be considered.

Costs

• The Treasury believes the cost of this new Act will cost $4 million annually.  This fails to depict the true cost of the billions of dollars lost in WTO sanctions.

Page where "Comments" will be made:  www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm

View 52 page Regulation Report: www.ustreas.gov/press/releases/reports/noticeofproposedrule.pdf

View Public Comments: www.regulations.gov.  Select DOT and enter Treas-DO-2007-0015 for docut ID