Deadline to Comply with the Requirements of the Unlawful Internet Gambling Enforcing Act is Approaching

The Act prohibits gambling businesses from knowingly accepting payments in connection with unlawful Internet gambling, including payments made through credit cards, electronic funds transfers and checks.

The Final Rule defines “unlawful Internet gambling” as the placing, receiving or otherwise knowingly transmitting of a bet or wager by any means which involves the use of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.

The Final Rule requires that U.S. offices of participants in designated payment systems establish and implement policies and procedures that are reasonably designed to identify and block,or otherwise prevent or prohibit transactions in connection with unlawful Internet gambling.

The Final Rule defines “participants in designated payment systems” to include “financial transaction providers.” The term “financial transaction provider” includes financial institutions. Furthermore, the definition of the term “financial institution” includes “any other person that, directly or indirectly, holds an account belonging to a consumer.” Therefore, the Final Rule applies to U.S. offices of financial institutions including Agencies and Branches of foreign banks (“Financial Institutions”).