ABA Opposing New Gambling Legislation

The Australian finance industry has come out in opposition of Nick Xenophon’s recent submission to the Australian Parliament’s special committee on gambling.  The proposed legislation essentially mimics the Unlawful Internet Gambling Enforcement Act passed in the United States in 2006.  The UIGEA outlaws the execution of monetary transactions by financial bodies on behalf of unlicensed online casinos.  Leading Australian banks are claiming that this bill will impair the operative abilities of the entire Australian financial industry.

The fight against the new regulation is being lead by Visa, Australia’s largest provider of credit services, and the Australian Bankers Association (ABA).  They claim that the implementation of such regulation could inhibit the operative abilities of Australian financial institutions to such an extent that it could actually lower their competitiveness and discourage online merchants from servicing Australian customers.  Furthermore, they claim that there is no proof showing that the prohibition of such transactions actually has the capability of preventing unlicensed internet gambling operations from successfully functioning.  The CEO of the ABA Steven Munchenberg that if such legislation is passed, the ability of the banks to perform efficient, timely online transactions will be put in jeopardy, and together with it the entire Australian online business industry.

When looking for the measures of success of such legislation, the precedent from the United States does not look good.  The execution of the UIGEA in America caused the unexpected closing of three major U.S. based online poker websites.  The result was millions of customers loosing access to monies they already deposited, and thousands of Americans loosing their jobs.  Many lawmakers look at the UIGEA as precisely what not to do, and are wondering what exactly Xenophon saw in it that made him submit such a similar proposal to the committee.