Online betting rules are at issue

The Bush administration is moving in its last weeks to adopt final regulations to enforce a controversial law that seeks to block Internet gambling. The move is drawing hot protests from Democratic lawmakers and supporters of online betting.

“This midnight rule-making will tie the hands of the new administration, burden the financial services industry at a time of economic crisis and contradict the stated intent of the Financial Services Committee,” the House panel’s chairman, Rep. Barney Frank (D-Mass.), wrote this week to Treasury Secretary Henry M. Paulson.

Frank asked Paulson to postpone the regulation, which was reviewed by the White House budget office last week, usually a final step before publication in the Federal Register.

White House spokeswoman Dana Perino said Tuesday that “no regulations are being rushed. They are all going through the process and getting the full due diligence required.”

At issue is a law that Congress passed hastily in 2006 when Senate Republicans, pushed by then-Majority Leader Bill Frist (R-Tenn.), attached it to an unrelated port security bill in a rush of year-end legislation. The law sought to curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers.

The result has been a cascade of disputes because the law didn’t offer a clear definition of Internet gambling, instead referring to existing federal and state laws, which themselves provoke differing interpretations.

Banks, credit unions and others have protested about being put in the position of enforcing an unclear law complicated by the difficulty of determining where payments are going and the fact that online betting businesses can disguise themselves with relative ease.