Guidance Issued for the Unlawful Internet Gambling Enforcement Act (UIGEA)

Posted: July 4, 2010 in banking compliance, compliance, OCC, OTS, regulation
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On June 30, 2010, the regulatory agencies issued guidance and examination procedures related to the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The guidance can be found here.

I had earlier prepared a slideshow on the main issues related to the UIGEA, which can be found at

The main highlights of the UIGEA and the issued guidance are:

  • The purpose of enacting the UIGEA is “to prohibit institutions from accepting payments from any person engaged in the business of betting or wagering with a business in unlawful Internet gambling”.
  • The UIGEA prohibits banks, financial institutions, payment processors, etc from accepting  payments relating to bets or wagers involving use of the Internet if those activities are unlawful under applicable law.
  • UIGEA defines a “participant” as “an operator of a designated payment system, a financial transaction provider that is a member of or, has contracted for financial transaction services with, or is otherwise participating in, a designated payment system, or a third-party processor.” The term “participant” does not include a participant’s customer unless the customer is also a financial transaction provider participating on its own behalf in the designated payment system.
  • The following five payment systems are covered by UIGEA: automated clearing house systems (ACH), card systems, check collection systems, money-transmitting businesses, and wire transfer systems.
  • Financial institutions should develop and implement policies and procedures, as appropriate, to ensure that transactions of this nature are not accepted.
  • Compliance with the rule was required as of June 1, 2010.

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