Interesting Conversation with bank guy about implementation of UIGEA

[Hock_]

So I was at a dinner party tonight and by total coincidence ended up talking to some guy who's (partly) responsible for a major financial institution's compliance with the UIGEA. Now I know that at least some of this has been posted about here before, and maybe there's nothing new here, but FWIW:

he said, for starters, that the proposed regs are due to be out by early July, but that it looks like they'll actually be issued earlier. He said that his bank is ready to start blocking transactions as soon as he gets instructions from his legal department. The blocking will be based on some kind of 4-digit code associated with all online financial transactions. Apparently, though, it's not that simple, since there's one code for ALL gambling-related transactions, including lotteries and horse racing. Which means that to block only transactions covered by the UIGEA, they'll need also to screen the "POS" information of the transaction, which will be much more difficult.

Finally, he volunteered that the easy way around the (expected) regs, will be for the sites just to use a code different from the one for gambling.

Overall a somewhat encouraging conversation.

[scrapperdog]

Does not sound that encouraging to me. IMO we have to hope the regulations themselves are not strict, as banks will enforce whatever regulations come out to the best of their ability.

[BluffTHIS!]

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Does not sound that encouraging to me.

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You miss this?:

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Finally, he volunteered that the easy way around the (expected) regs, will be for the sites just to use a code different from the one for gambling.

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The sites already do a lot of sureptitious stuff to fly under the radar, so why wouldn't they do something this easy? Of course it does take the cooperation of their banks, but the banks who don't have a problem dealing with the sites right now likely won't have a prob with that.

Maybe that Billmandude will come here with some theory though as to why that won't happen and we should panic now instead of waiting a few months to see.

[scrapperdog]

Anyone that thinks banks will be looking the other way when the regulations are issued is fooling themself. What exactly do they have to gain by doing this other than getting themselves in trouble with the government? Banks are doing exactly what the OP said they are doing, geting ready to enforce when that day comes and they find out the regulations.

Something tells me codes are issued and poker sites dont get to pick and choose the code they want to use. I dont think it will be that easy. Guess we will see though.

[BluffTHIS!]

Yeah, issued by *the sites' banks*. Any bank being used by the sites still doing biz in the US doesn't have a problem with same, and won't for changing codes to help their customers. Why should they? They already don't care. And on the US side, a changed code means they can't block, not won't block as in "looking the other way".

[scrapperdog]

[ QUOTE ]
Yeah, issued by *the sites' banks*. Any bank being used by the sites still doing biz in the US doesn't have a problem with same, and won't for changing codes to help their customers. Why should they? They already don't care. And on the US side, a changed code means they can't block, not won't block as in "looking the other way".

[/ QUOTE ]

That does seem to be somewhat good news then. Gives a little hope for a possible workaround.

[Sniper]

[ QUOTE ]
talking to some guy who's (partly) responsible for a major financial institution's compliance with the UIGEA.

[/ QUOTE ]

Really, what's his job title? On the business or IT side? Corporate or Branch?

[Lucky]

any word on whether his bank has any plans to block checks from poker sites?

It's not part of bill, but i keep hearing rumors, hopefully from trolls, having probs cashing checks. Also, sites are having to switch processors, so hopefully thats not because banks are cracking down on the checks originating from them.

[Hock_]

Checks are specifically covered by the legislation.

[permafrost]

[ QUOTE ]
Checks are specifically covered by the legislation.

[/ QUOTE ]Not "checks from poker sites".

[meleader2]

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[ QUOTE ]
Checks are specifically covered by the legislation.

[/ QUOTE ]Not "checks from poker sites".

[/ QUOTE ]

While the wording of the UIGEA says that checks from poker sites are legal, what are the banks going to do? That's what you have to ask.

[questions]

I think if true, these regulations WILL make it more difficult for some people, further restricting the pool of players.

[Uglyowl]

I don't fully believe the original poster's source. There are many things that don't jive here.

[BluffTHIS!]

Ugly,

The only thing that doesn't jive is the belief of many that the regs will be terribly effective. Any enforcement is based on some type of blacklist of either codes, bank account names, etc., and will be sure to be updated relatively slowly. So all the sites have to do, with the aid of friendly private foreign banks that don't give a rat's ass about the IUGEA (but also do a large legit biz in other non-gamling areas making it harder to target them), is to constantly create new accounts to payout with, with codes that won't or can't be blocked. Sure it's a lot of effort, but the sites, especially the sports books, have a huge incentive to do that.

If the DOJ's preferred method of threats and intimidation fail to eliminate all sites currently in the US market and the money transfer methods they rely on, then all they are left with are those blacklists which can easily be defeated.

[BigAlK]

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Checks are specifically covered by the legislation.

[/ QUOTE ]Not "checks from poker sites".

[/ QUOTE ]

Checks to poker sites aren't either, are they? As a practical matter I doubt banks could effectively cut off either.

[BigAlK]

[ QUOTE ]
It's not part of bill, but i keep hearing rumors, hopefully from trolls, having probs cashing checks. Also, sites are having to switch processors, so hopefully thats not because banks are cracking down on the checks originating from them.

[/ QUOTE ]

The myriad of threads I've seen on this always turn out to be something else. I have yet to receive a check from a poker site (one is in the mail though) so I'm not sure how the payor is identified on the check, but as I understand it it is probably the check processor's, not the site's name. Certainly the bank account is the check processor's. If a check processor is cutting checks for other businesses and banks start refusing checks cut by that processor they'll be heading down an extremely slippery slope. Since the UIGEA only covers sending money to poker sites I can't imagine any bank refusing a check based solely on being from a check processor that cuts checks for poker sites without some legitimate business reason that has nothing to do with the money coming from poker. They have no legal requirement to do so and no sound business reason to do so. In fact it would be bad business to turn down deposits.

[MiltonFriedman]

From this conversation, it appears "compliance" might be limited to tramsactions coded 7995, the mark of the Beast to the Evangelical Right. This is strictly a credit/debit card coding and would not touch ACH transfers. If so, that is good news .

It is troubling but unsurprising that NO ONE on our side has had input into the Regulations being written, despite the APA requirement of a public notice and comment period. I hope that some enteprising counsel out there recognize that failure to comply with the APA is grounds for enjoining the Regs .... failure includes getting private input from only one side.

As for cashouts FROM a poker site, those are NOT covered by the UIGE Act, but a bank can refuse the business anyway. The key is NOT to bee too obvious, and please do NOT post here WHICH bank your cashout checks are drawn on ..... Have SOME clue about the US you are in post-UIGE.

Also, why NOT tell us what bank this tool worked for, so we can avoid it ?

[HSB]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Checks are specifically covered by the legislation.

[/ QUOTE ]Not "checks from poker sites".

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While the wording of the UIGEA says that checks from poker sites are legal, what are the banks going to do? That's what you have to ask.

[/ QUOTE ]

Why the hell would the banks do something that costs money that they don't have to do?

[Jay Cohen]

My sources tell me otherwise. My sources tell me the regs will actually be delayed. But who knows?

They do have to have a period for public comment, usually it is about 60 days. Then they can go with them as written or make modifications.

[Hock_]

[ QUOTE ]
It is troubling but unsurprising that NO ONE on our side has had input into the Regulations being written, despite the APA requirement of a public notice and comment period

[/ QUOTE ]

My impression is that the PROPOSED rule will be issued in early July (or earlier), which would then start the notice and comment period.

[Hock_]

[ QUOTE ]
Poster: Uglyowl
Subject: Re: Interesting Conversation with bank guy about implementation of UIG

I don't fully believe the original poster's source. There are many things that don't jive here.



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Hey, I don't know this guy from Adam. That said, he was a middle-aged geeky guy and he brought up the subject, not me, so I'm pretty sure he wasn't BS-ing me.

[meleader2]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
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Checks are specifically covered by the legislation.

[/ QUOTE ]Not "checks from poker sites".

[/ QUOTE ]

While the wording of the UIGEA says that checks from poker sites are legal, what are the banks going to do? That's what you have to ask.

[/ QUOTE ]

Why the hell would the banks do something that costs money that they don't have to do?

[/ QUOTE ]

Maybe it's easier than you think. Why else would Citizen's Bank already being doing it? (See ZOO)

[BigAlK]

[ QUOTE ]
Maybe it's easier than you think. Why else would Citizen's Bank already being doing it? (See ZOO)

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Unless something has changed in the last day it appeared that this was an issue with the check processor, not that the funds originated from a poker site. It appeared that the problem had been resolved and funds released as of the end of last week.

FWIW, I probably know just enough to be dangerous, I'm definitely no expert on banking although I worked in banking several years ago and have a technology background. With this minimal knowledge it seems unlikely banks would go beyond what the law requires. Shutting off checks from poker sites is definitely beyond the scope of the UIGEA and doing this probably would open them up to potential liability.

[MiltonFriedman]

My point in that quote is that clearly your banker fellow's comments reflected considerable input from SOMEONE long before the public comment period, shaping the proposed regs.

Also, how about coughing up the name of the Bank this guy was from, THAT would be a service to your 2+2 community. After all, your encounter was by chance, so it is not like you're sworn to secrecy.

[Hock_]

UBS

[Sniper]

[ QUOTE ]
[ QUOTE ]
talking to some guy who's (partly) responsible for a major financial institution's compliance with the UIGEA.

[/ QUOTE ]

Really, what's his job title? On the business or IT side? Corporate or Branch?

[/ QUOTE ]

Hock, how about answering this one...

[Hock_]

[ QUOTE ]
what's his job title? On the business or IT side? Corporate or Branch?

[/ QUOTE ]

I don't know the answers. I talked to the guy for all of 10 minutes. My sense is that he's responsible in some capacity for bank-wide compliance. I don't think he was IT, but it seemed like he was familiar with the technical issues that could be involved in complying with whatever the UIGEA regs turn out to be -- he was the one talking about the 4-digit code and the difficulties associated with screening "POS" entries, etc.

[daedalus]

[ QUOTE ]
It is troubling but unsurprising that NO ONE on our side has had input into the Regulations being written, despite the APA requirement of a public notice and comment period. I hope that some enteprising counsel out there recognize that failure to comply with the APA is grounds for enjoining the Regs .... failure includes getting private input from only one side.


[/ QUOTE ]

Just a note, but Wynton on this forum had mentioned that he was asked to advise on the regs about 3 months ago. Haven't heard anything since.

[KotOD]

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UBS

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UBS doesn't even have a retail banking offering.

[Sniper]

[ QUOTE ]
[ QUOTE ]
It is troubling but unsurprising that NO ONE on our side has had input into the Regulations being written, despite the APA requirement of a public notice and comment period. I hope that some enteprising counsel out there recognize that failure to comply with the APA is grounds for enjoining the Regs .... failure includes getting private input from only one side.


[/ QUOTE ]

Just a note, but Wynton on this forum had mentioned that he was asked to advise on the regs about 3 months ago. Haven't heard anything since.

[/ QUOTE ]

If I remember correctly, that's not what he said...

[Hock_]

I think some people seem to be missing the point here: Someone with actual knowledge of the steps that may be necessary to comply with the (anticipated) regs says that they will be difficult to enforce and can probably be worked around easily. I know that may be disappointing to the Chicken Littles out there, but that's what he said.

I can't guarantee he's right. Maybe it's all just an elaborate joke made to make me look silly and Ashton Kucher will jump out from behind my sofa in a minute and you'll all point and laugh. But, as I said, I thought it was somewhat encouraging.

[DocTrock]

A year ago, we had several high quality payment processors. We had Party Poker, we had adds on TV...I even saw PP advertising on Newsmax.com for a week or two. (right wing website)

Now, we have what we have...nuff said.

I am just curious as to why there seems to be such a strident optimism with regard to how UIGEA will be implemented?

Is this the kind of "optimism" that causes people to chase a two outer to the river? Is this the same thing as saying, "I call," when you know your opponent has AA?

There are only a couple things the government does well. One of them is taking away the freedom of its citizens. Since the Patriot act, banking regulations are far easier to implement. I guarantee that the regs will be quite effective, because they don't involve serving citizens, or helping people. They are a grievous intrusion of our liberty and an invasion of privacy. This sort of thing is usually done well by our illustrious gov.

FWIW, I'm cheering for the anti-chicken little crowd. I hope they hit that draw, I really do. However, I'm not as optimistic and am gonna wait for a new, regulated product to hit the US market.

Until then, It's 4-8 at the BM for me.

[Sniper]

[ QUOTE ]
I think some people seem to be missing the point here: Someone with actual knowledge of the steps that may be necessary to comply with the (anticipated) regs says that they will be difficult to enforce and can probably be worked around easily. I know that may be disappointing to the Chicken Littles out there, but that's what he said.

I can't guarantee he's right. Maybe it's all just an elaborate joke made to make me look silly and Ashton Kucher will jump out from behind my sofa in a minute and you'll all point and laugh. But, as I said, I thought it was somewhat encouraging.

[/ QUOTE ]

Hock, you are missing the point... the regs haven't even been drafted, and someone is telling you they will be hard to enforce...

If you said it may take "a while" to implement, ok... but make no mistake... once there are regs, there will be movement to implement & enforce them!

[Hock_]

[ QUOTE ]
If you said it may take "a while" to implement, ok... but make no mistake... once there are regs, there will be movement to implement & enforce them!

[/ QUOTE ]

OK, I was trying to be nice, but this is getting silly. I was a lawyer for 10 years at one of the top firms in the country, so I know all about regulations and enforcement and compliance. OF COURSE banks will enforce whatever the regs say. But it doesn't take a genius to guess at what the forthcoming regulations will likely require. In fact, it's not unlikely that banks have been involved behind the scenes in the drafting process. If the regs say "block all #### transactions -- as this guy apparently believes they will -- then what he said is that it will be easy for sites to get around that. [Btw -- that's what regs do -- they go from the generalities of legislation ("block all transactions with gambling sites") to prescribe the specific steps that the regulated entity must take]. IF he's right, and I personally have no idea one way or the other whether he is, then THAT'S GOOD.

Geez.

[KotOD]

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[ QUOTE ]
If you said it may take "a while" to implement, ok... but make no mistake... once there are regs, there will be movement to implement & enforce them!

[/ QUOTE ]

OK, I was trying to be nice, but this is getting silly. I was a lawyer for 10 years at one of the top firms in the country, so I know all about regulations and enforcement and compliance. OF COURSE banks will enforce whatever the regs say. But it doesn't take a genius to guess at what the forthcoming regulations will likely require. In fact, it's not unlikely that banks have been involved behind the scenes in the drafting process. If the regs say "block all #### transactions -- as this guy apparently believes they will -- then what he said is that it will be easy for sites to get around that. [Btw -- that's what regs do -- they go from the generalities of legislation ("block all transactions with gambling sites") to prescribe the specific steps that the regulated entity must take]. IF he's right, and I personally have no idea one way or the other whether he is, then THAT'S GOOD.

Geez.

[/ QUOTE ]

Seems like you're missing a big piece of the puzzle here. UBS has no retail banking offerings for the US. Either OP is full of [censored], or the "guy" that he had the "conversation" with is full of [censored].

[BluffTHIS!]

All,

I don't know why this has turned into such a nitfest on Hock. All he has done was relate a chance encounter and some potential info on how the regs are to be implemented and that there is an easy way around. He has already stated he doesn't know this guy, and that as the guy brought it up first, it's unlikely to be a total fabrication. As to Kot's statement above about USB (not UBS), while it seems true from a quick google search that they don't offer retail banking, they do offer various "wealth management" services. Which means somehow their individual clients have to transfer some wealth to them to manage via checks, wire transfers, etc. So even if they rarely or never would come across the kind of transactions mainline retail banks would, they nonetheless will have to have measures in place to comply in the event it's necessary.

Now while I have posted in this thread previously as to why I believe this account Hock relates is likely true, i.e. the regs will be in fact easily circumventable no matter how they are written through a constantly changing account lineup, still of course we won't know until after the regs have been put in place and then we see what happens.

So the bottom line again, whether to the doom-and-gloomers, or the glass-half-full types like myself, is that we just have to WAIT AND SEE. So all we can do is analyze whether the account, *if true* of how the regs will be implemented *might or might not be* circumvented. But it's still speculation EITHER WAY. In a few months we'll know. And in the meantime, why not stop this nitpicking of Hock? He only related something he heard and hasn't been asserting it is 100% correct. He just wanted to pass it along to us and he has. If you think it's highly likely to be BS, then fine. But you really don't need to further interrogate Hock on this, because HE'S JUST A MESSENGER.

[KotOD]

[ QUOTE ]
All,

I don't know why this has turned into such a nitfest on Hock. All he has done was relate a chance encounter and some potential info on how the regs are to be implemented and that there is an easy way around. He has already stated he doesn't know this guy, and that as the guy brought it up first, it's unlikely to be a total fabrication. As to Kot's statement above about USB (not UBS), while it seems true from a quick google search that they don't offer retail banking, they do offer various "wealth management" services. Which means somehow their individual clients have to transfer some wealth to them to manage via checks, wire transfers, etc. So even if they rarely or never would come across the kind of transactions mainline retail banks would, they nonetheless will have to have measures in place to comply in the event it's necessary.

Now while I have posted in this thread previously as to why I believe this account Hock relates is likely true, i.e. the regs will be in fact easily circumventable no matter how they are written through a constantly changing account lineup, still of course we won't know until after the regs have been put in place and then we see what happens.

So the bottom line again, whether to the doom-and-gloomers, or the glass-half-full types like myself, is that we just have to WAIT AND SEE. So all we can do is analyze whether the account, *if true* of how the regs will be implemented *might or might not be* circumvented. But it's still speculation EITHER WAY. In a few months we'll know. And in the meantime, why not stop this nitpicking of Hock? He only related something he heard and hasn't been asserting it is 100% correct. He just wanted to pass it along to us and he has. If you think it's highly likely to be BS, then fine. But you really don't need to further interrogate Hock on this, because HE'S JUST A MESSENGER.

[/ QUOTE ]

Bluff:

Hock_ said "UBS". Not USB. They are distinctly different companies.

[Russ Fox]

Most investment banking houses offer banking services even if they don't have retail banks. You can write checks against your money market funds at a brokerage firm, for example. Thus, they must comply with banking regulations.

This account seems very believable to me.

-- Russ Fox

[disjunction]

Of course you have to factor in that somebody at a dinner party will pretend he's up on the whole story when he only knows his part.

But the rest rings true for these reasons:

(1) It sounds easy and cheap for the banks to implement. No sophisticated software required.
(2) It allows them to tell anyone who asks that they tried, really. They tried.