We Won't Tell You What It Is; Just Don't Do It


Yesterday the House Financial Services Committee approved a bill that would require federal regulators to define "unlawful Internet gambling" before demanding that financial institutions block transactions related to it. The Payments System Protection Act, sponsored by committee Chairman Barney Frank (D-Mass.), would delay the imposition of regulations required by the Unlawful Internet Gambling Enforcement Act of 2006. That law left the legal status of various kinds of online gambling ambiguous, and when payment processors asked the Treasury Department for guidance, they were told that had to figure out what was legal on their own. Testifying before the House Judiciary Committee in November, professional poker player Annie Duke summed up the situation this way:

The posture of the federal government is, "We are going to create a new federal crime, but we will not tell you what it is." In the proposed rule, the regulators explain their refusal to resolve this by saying that to do so would require them to examine the laws of the federal government and all 50 states with respect to every gaming modality, and that this would be unduly burdensome. Yet that is exactly what they are requiring the general counsel of every bank in the country to do.

Frank, who is also sponsoring a bill that would explicitly legalize (and regulate) online gambling, closes out my June reason article about the online gambling crackdown with a ringing defense of the freedom to engage in "recreational activities" that "human beings enjoy" (a category in which he also includes pot smoking).