IMEGA came out with a press release yesterday, saying that the US law firm Alston & Byrd has released an advisory announcing that US resident could easily circumvent the UIGEA regulations.

Full release below.

Press Release
Contact: Michael Waxman
(202) 872-0010 or (202) 872-4860

Burdens and Vulnerabilities in Proposed Rules to Enforce Unlawful Internet Gambling Enforcement Act Detailed

October 29, 2007 – U.S. financial institutions would face a variety of regulatory burdens to prevent the processing of prohibited Internet gambling transactions under the proposed rules to implement the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) according to a new analysis. According to the advisory “Proposed Internet Gambling Regulation Would Require New Policies and Procedures for the U.S. Payment Systems,” by the national law firm Alston & Bird, U.S. residents would be able to circumvent the proposed regulations and continue to gamble online by processing financial transactions through a foreign bank account in a jurisdiction where Internet gambling is legal.

The challenge U.S. financial service firms face is that enforcement of UIGEA will be very difficult and burdensome. “The proposed rules create an unprecedented and unwieldy regulatory burden on the U.S. financial services sector,” said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative. “U.S. financial service companies are being left to interpret ambiguous State and Federal gambling laws, which do not clearly differentiate between legal and illegal Internet gambling activities or transactions, and then implement unreasonable and costly solutions to achieve compliance.”

The advisory provides an overview of the proposed regulation and raises concerns about regulatory burden due to the impact of implementation costs on U.S.-based payment service companies and ability for U.S. resident to be able to still gamble online after adoption of the rules. U.S. financial service companies with concerns about potential burdens and compliance exposure are encouraged to submit comments on the draft rules published on or before December 12, 2007.

Legislation to regulate and tax Internet gambling would provide a rational and safe approach to allow Americans to gamble online. “Rather than waste valuable resources attempting to enforce the Unlawful Internet Gambling Enforcement Act, a flawed law that erroneously presumes prohibition will keep millions of Americans from gambling online, the U.S. should instead regulate and tax Internet gambling,” added Sandman.

Congressman Barney Frank (D-MA) and Jim McDermott (D-WA) have introduced the Internet Gambling Regulation and Enforcement Act and Internet Gambling Regulation and Tax Enforcement Act, companion pieces of legislation, to regulate and tax Internet gambling activity. The legislation would require licensed Internet gambling operators to put in place safeguards to protect against underage and compulsive gambling and ensure the integrity of financial transactions. Taxation of Internet gambling is expected to generate between $6 billion and $25 billion in revenues for the U.S. Treasury in the first five years of enactment.

The Alston & Bird advisory is available at

About Safe and Secure Internet Gambling Initiative
The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.