Barney Frank

Congressman Barney Frank's Payments Systems Protection Act has passed the U.S. Congress House Financial Services Committee on a vote of 30-19. In June, the first version of the bill failed in a 22-22 tie vote but changes in the language and some serious political arm-twisting will now lead to a vote of the full House of Representatives. When this will take place is in question, as the Congress is scheduled to adjourn to allow members to go home and campaign for the November elections.

Congressman Frank said,

“We made some changes to [HR 5767] to try to get a majority of the votes as well as a broader agreement. First, it had always been our intention to allow pro sports leagues to opt out. They asked to be opted out of the bill and we’ve done that. The bill will protect sports from being included. It also asks that a list be prepared by the Treasury of what is and isn’t acceptable. You have a right to know what the law is and this would give people the right to know what is and isn’t covered under the UIGEA.”

An amendment to the bill, also introduced by Congressman Frank, calls for professional sports leagues to be able to be exempt from the bill as well as what Safe and Secure Internet Gambling Initiative spokesperson Michael Waxman called a “black list” to be developed to determine what activities are permitted under the UIGEA. Also in this time of financial crisis for the banks and other third party transfer sites, the onus of a poorly written law would be removed or at least clarified.

We all know that the United States government has been making trade concessions right and left to compensate various countries to the ban on internet gaming imposed by the Unlawful Internet Gaming Enforcement Act. One might wish to know how much has this semi-law cost the U.S. taxpayers. Unfortunately, like so much done in a free and open society like the U.S., those numbers are not available from the government.

Well one U.S. Congressman has asked: How Much? and perhaps we will eventually get those numbers.

Congressman Peter DeFazio, a demomcrat from Oregon, has requested the U.S. Trade Representative (USTR) disclose trade concessions made to foreign trading partners without Congressional approval. DeFazio's inquiry raises the possibility of Congressional intervention to void new market access commitments granted by USTR to the European Union and other complainants as compensation for a United States trade violation regarding Internet gambling.

In a letter circulated to all members of Congress last week, DeFazio encouraged his colleagues to join him in calling for the USTR to provide a copy of the concession agreement between the United States and the European Union. The USTR had recently rejected a Freedom of Information Act request for the same document, claiming the agreement was classified for national security reasons.

"There is a concern that the USTR may have been ambitious in its use of a ‘national security' classification to avoid any publicity of which new business sectors are to be subject to the GATS (General Agreement on Trade in Services) treaty."

"The issue will be whether the USTR abused its authority by granting new market access to the EU without first securing the consent of the trade committees in Congress,"

said Nao Matsukata, formerly Director of Policy Planning for USTR Robert Zoellick.

"Ultimately, this could invalidate the deal with the EU and cause various WTO Members to revisit the issue of fair compensation from the United States."

Congressman DeFazio's request is an indication that the Administration's unilateral action to attempt to resolve the WTO Internet gambling dispute is in jeopardy.

"Congress should have been consulted before the US agreed to these trade concessions,"

said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

"We hope that Mr. DeFazio's colleagues will join him in demanding more transparency, communication, and consultation from the Administration on Internet gambling. A non-discriminatory market for Internet gambling in the United States will restore integrity to the international trading system."

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The DeFazio request comes following a contentious trade dispute over Internet gambling, in which the Caribbean nation of Antigua successfully challenged the regulation of Internet gambling in the United States. The European Union announced earlier this week that it will open an investigation into a possible international trade violation by the US on this issue. The investigation is the result of a Trade Barriers Regulation complaint filed by the Remote Gambling Association (RGA), which represents the largest remote gambling companies in Europe. The RGA claims the US is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gaming operators, while allowing domestic U.S. online gaming operators, primarily horse betting, to flourish.

Legislation introduced by Representative Barney Frank (D-MA), the Internet Gambling Regulation and Enforcement Act (H.R. 2046), would regulate Internet gambling and resolve the international trade dispute.

"Rather than paying out millions in trade concessions, which would have an adverse impact on the American economy, the US should embrace the legislative solution presented by the Frank bill, which brings the U.S. into compliance by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators,"

said Jeffrey Sandman, spokesperson of the Safe and Secure Internet Gambling Initiative.