Last week, the US Treasury and the Federal Reserve, the agency in charge of banking regulations, stated that they would extend the deadline that member banks had to meet to comply with regulations under the Unlawful Internet Gambling Enforcement Act (UIGEA). When the legislation passed in 2006, the deadline was set for 1 December 2009. The government agencies have now extended the deadline to 1 June 2010.

Several federal lawmakers had called for the agencies to extend the deadline while they seek to clarify the regulations that it outlines. Some have noted that the rules as they are currently outlined put too much of a strain on bank officers in charge of complying with federal rules. Many of the country’s banks are facing much more serious problems, such as the credit crunch, and may not have the resources to devote to following the new rules.

Congressman Barney Frank (D-MA) has been the most outspoken member of the US House of Representatives to come out against the new law. He has proposed legislation that will allow for the regulation and taxation of internet gambling transactions. Mr. Frank says that the tax revenue that such a law could generate could help to pay for the growing federal budget and to cover programs such as national health care.

Senator John Kyl (R-AZ) and Congressman Spencer Bachus (R-AL) voiced their opposition to the postponement, stating that special interest groups representing the gambling industry were behind the delays. The two men are also seen as leaders of the anti-gambling sections of their political parties and could be considered to be making an appeal to their hard-line constituents.

Members of the banking industry welcomed the delay in the law’s implementation, which would force banks to prohibit any transactions between US-based customers and online gaming sites, many of which are hosted overseas. Representatives of the American Banking Association said that they felt the law was too vague and did not clearly define what constituted an “illegal online gambling” transaction, as many customers can buy lottery tickets and bet on horse races online currently.