The Federal Reserve and Treasury officials in the United States can’t get it together. Between struggling with the country’s financial crisis and the falling economy, they are at a loss as to what to do. Add to that the less than clear definition of what is considered legal gambling, and legislatures find themselves perplexed. The problem: how do you construct laws that ban banks and credit cards from sending money to illegal Internet gambling sites when you don’t know what type of gambling is illegal online?

Interpreting the federal law is what’s causing the conundrum simply because Congress never clearly defined what should be viewed as legal and what should be viewed as illegal. The 2006 bill simply stated that companies were prohibited from accepting payment in any form that was earned during ‘unlawful Internet gambling’. It also stated that the Federal Reserve and the Treasury Department were to develop laws to enforce it.

Two very important questions must be clarified before any laws can be crafted let alone enacted. What is considered illegal gambling? How are financial companies supposed to recognize an illegal online gambling site? The act was written on the reliance of the current laws in each state and the overarching Federal laws. To top if off, online horserace betting was excluded and viewed as permissible under the Interstate Horseracing Act of 1978.
Huh?

That’s what gambling and financial companies are pretty much saying and they are insisting that the answers to these questions be defined before any law is put together. They want a list of what should and should not be blocked – games, transactions, and websites. At this point, financial companies are just banning transactions from everyone that is related to gambling because they have no idea what is and what isn’t a legal gambling transaction.

The staff at the Federal Reserve also wants clarification. They want to be told if pari-mutuel betting and poker online should be considered legal. It’s legal to play table games in brick and mortar establishments in some states. So are slots. Where is the definition?

Right now the Federal Reserve staff is simply trying to come up with practical examples while waiting for clarification. Once they receive they’ll be able to finalize the laws so everyone understands what can and cannot be played online.

Hopefully it will be considerably clearer than the direction Congress gave them in the first place.