Online Gambling Regulations Will Mean New Due Diligence for Banks, Say Analysts

By Matt Squire

Proposed federal banking regulations targeting online gambling will force financial institutions to revamp their customer due diligence procedures, say anti-money laundering consultants. The proposed rules, issued by the Federal Reserve Board and the U.S. Treasury Department in October, would require financial institutions to prevent payments to illegal Internet gambling operations as defined under the Unlawful Internet Gambling Enforcement Act (UIGEA). The act was signed into law in October 2006 and has survived repeated challenges from lawmakers and the financial industry. Under the regulations, financial institutions will need to develop customer due diligence and other preventive procedures that will stop payments...