The US Payment Systems Protection Act, or Bill HR 5767, which was scheduled to be amended yesterday, was voted down. Had the bill gone through, it would have posed a serious challenge to the Unlawful Internet Gambling Enforcement Act (UIGEA).

Reviewing the bill was the House Financial Services Committee. The committee, however, is deeply divided along party lines, and despite the Democrat’s majority in Congress, the GOP line managed to prevail. As iGaming News reports:

The bill, sponsored by Barney Frank, Democrat of Massachusetts, and Ron Paul, the libertarian Texas Republican, would have prevented the Treasury Department and Federal Reserve Board from finalizing the proposed regulations for the Unlawful Internet Gambling Enforcement Act.

“The traditional ‘family-values’ Republicans defeated a common-sense measure that had nothing to do with the underlying issue of whether American adults should be allowed to freely gamble with their own money,” Steven W. Adamske, a spokesman for Mr. Frank’s office, told Interactive Gaming News in a telephone interview.

As in all things politics, this doesn’t close the book on online gaming in the US. With a presidential race underway and Barack Obama backed by so much momentum, things in both the White House and Congress can change in any number of ways. For the immediate future, however, online gaming operators will just have to focus on other markets.

It seems that the US gaming market may be slated to be re-opened to free competition. Originally introduced in April and co-sponsored by Congressmen Barney Frank of Massachusetts and Ron Paul of Texas, Unites States Bill HR 5767 was schedule to amended next Wednesday. In its current form the bill would prohibit both the Treasury Department and Federal Reserve from “proposing, prescribing or implementing” any regulations under the Unlawful Internet Gambling Enforcement Act (UIGEA).

Although it is unknown how the bill is going to be amended, it originally had the potential to reverse the legislation that pretty much shut the international community out of the US market by making it illegal to process online gambling transactions in the United States. Although the UIGEA contravenes agreements under the WTO, the US government has shown little willingness to reverse this piece of legislation.

Get more information on Bill HR 5767 from GovTrack.us

For several years now, Ladbrokes has been struggling to offer its services to Dutch players. The case was before the Dutch Supreme Court on Friday, and the court has ruled that it be referred to the European Court of Justice (ECJ).

Now, unless the ECJ rules in favor of Ladbrokes, the company will still be blocked from operating in the Netherlands. Nevertheless, given how the Dutch laws see unsustainable in the greater context of EU law, it’s no surprise that Ladbrokes is feeling very optimistic about going before the ECJ. As the Gaming Intelligence Group reports:

Ladbrokes has said it welcomes the Dutch Supreme Court’s decision to refer questions regarding its case to the European Court of Justice for clarification in the context of EU law.
[...]
Ladbrokes Managing Director of eGaming, John O’Reilly, said: “We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so.”
[...]
Ladbrokes has previously complained to the European Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers, as have numerous other online gaming operators.

In late May, Betfair won the right to have its case against the Dutch Minister of Justice referred to the ECJ. In that case the company argued that being told it cannot accept bets without a Dutch licence, after being twice denied the opportunity to apply for such a licence by the Dutch State, is legally unsustainable.

There seems to be an overwhelming consensus in the online gaming industry that the European Union law favors gaming operators over state monopolies. It is expected, then, that operators taking their cases before the ECJ, such as Ladbrokes, will come out on top.

Of course, once the ECJ hands down a ruling, there’s the challenge of getting the EU member-state in question to adhere to it. How much of a challenge that this proves to be, however, only time will tell.

The parent company of Citadel Commerce Corp, ESI, has become the third payment processing company to enter a non-prosecution agreement with the US Justice department. To defer prosecution under the Unlawful Gambling Enforcement Act, ESI has agreed to pay over $9 million. As iGaming News reports:

ESI Entertainment Systems Inc., the parent company of money transfer provider Citadel Commerce Corp., has agreed to pay the United States government more than $9.1 million to avoid prosecution for processing online gambling transactions in the United States.

Michael J. Garcia, the United States Attorney for the Southern District of New York, announced Thursday that ESI admitted wrongdoing with its participation in a conspiracy to conduct illegal Internet gambling.

Under the agreement, prosecution will be deferred for 18 months if specified conditions are met. Among other conditions, ESI is not allowed to participate in processing online gambling transactions with customers in the United States.

Get the Full Story @ iGaming News.