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As reported here the Payment System Protection Act , designed to limit the scope of the UIGEA and refine what it is that constitutes illegal online gambling, was passed through the House Financial Services Committee yesterday. Seeing as this is a potentially groundbreaking issue for the poker world there follows a more detailed look at the history and potential ramifications of the bill:

Since it’s introduction the vague nature of the UIGEA has been a cause of some concern throughout government, the banking industry and the online gaming world. Although it is quite clear, as was it’s original intention, sports betting is to be prohibited under the act, the position of poker and other skill games is hazy. This has lead to the fractured market we experience today, were some companies have chosen to withdraw from the U.S. while others have continued to operate.

The key idea behind HR 6870 is to ensure that the UIGEA only legally applies to those activities that have already been banned under federal law. Namely: Sports betting. To avoid further confusion it also called for the Federal Reserve and the U.S. Treasury to provide a clear guide as to what is and what is not considered illegal under those existing laws. The UIGEA’s other major sticking point, which this bill also hopes to address, is the shifting of legal responsibility away from the government and on to the financial institutions. The banks are reluctant to accept the job of punishing those who transfer money to and from gambling websites and are unlikely to make any significant action without strict guidelines to limit their culpability.

The bill did not have a smooth ride to the vote, a last minute protest from American sports leagues attempted to derail proceedings. Their behavior was generally greeted with derision by supporters of the bill. Rep. William Clay pointing out that the bill makes explicit that sports betting is outlawed under current law and that “if that doesn’t satisfy major league sports, nothing else will.”

The House Financial Services Committee is responsible for overseeing the entire financial services industry in America, as well as the Federal Reserve and the United States Department of Treasury. It’s approval of a bill that would see the potential legalization of online poker is a significant step in restoring health to the poker industry.

The lobbying group, the Poker Players Alliance, were plainly delighted that the bill had been so successful. PPA Chairman Alfonse D’Amato said that “The PPA is pleased that the House Financial Services Committee today recognized the need to provide necessary clarification to what constitutes ‘unlawful Internet gambling’ under the [UIGEA] by passing H.R. 6870.”

The bill will go before committee in congress in 2009 and discussion of it may well delay full implementation of the UIGEA.