Australian Financial Institutions Against New Legislation

By Debra SaundersGoogle

New proposed legislation has caused outrage among Australian financial institutions.  The recent submission of independent senator Nick Xenophon to the special parliamentary committee on online gambling calls for similar legislative action to that of the Unlawful Internet Gambling Enforcement Act (UIGEA) already in place in the United States – to prohibit financial institutions from performing transactions on behalf of unlicensed online casinos.  Visa, Australia’s largest credit provider, is leading the front against the new regulations.

The claim of the Australian Bankers Association (ABA) is two fold.  On the one hand, they say that the execution of the proposed measures would be extremely complicated and could severely inhibit the ability of the banks to operate.  To illustrate the severity of the situation they claim that the abilities of the local institutions to compete in the world market could be hindered greatly.  Secondly, it has never been proven that this form of enforcement actually has the power to stop clandestine online gambling altogether.

Steven Munchenberg, the CEO of the ABA, was quoted saying that if online service providers and merchants see Australia as a place where online transactions can not be carried out in an efficient matter, then they might choose not to do business or provide services for patrons originating in Australia.

Another point brought up by opponents of the law is what its sibling wrought in the US.  When the UIGEA was passed in the US, it brought down three major American online poker sites; millions of customers lost access to their accounts and with them millions of dollars.  The shut down put thousands of Americans out of work and caused the bulk of online poker to move overseas and take its potential tax revenue with it. 

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