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First National Bank thought they were running a legitimate competition in which people could have the chance to win a million dollars by putting money into an account for thirty two days.
The competition had people putting one hundred dollars into a thirty two day notice account. With the money in the account, people had the chance to win one million dollars.
A Pretoria High Court order ruled that the competition was against the law, and that it constituted illegal wagering. The bank does not believe what they were doing was illegal.
The bank feels that since the money could have been withdrawn from the account in full after the thirty two days, that there was no risk of losing money. That, they claim, did not constitute gambling.
The court, however, saw things differently. They claim that the competition is prohibited under the Lotteries Act. The bank appealed the ruling.
The Supreme Court of appeals ruled on Friday in favor of the High Court, and did not accept the argument from First National. The appeal was then dismissed.
Online Gambling Ban Regs Get Ripped Apart at House Hearing
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Closing the first part of the House Financial Services Subcommittee on Domestic and International Monetary Policy, Trade, and Technology Hearing on the proposed regs for the Unlawful Internet Gambling Enforcement Act (UIGEA), Rep. Luis V. Gutierrez, Head of the Sub-Committee, advised Ms. Louise Roseman from the Federal Reserve Bank, and Ms. Valerie Abend from the Department of Treasury, to tread very carefully in proceeding with instituting the proposed regulations. He remarked how there was more heated discussion, debate, and criticism of this topic than on any other his committee has seen in the year he has resided over the sub-committee, “So be careful,” he said.
The main area of concern from the two witnesses was the ambiguity of the UIGEA, which makes it nearly impossible to determine what illegal online gambling actually is as defined by the 2006 law.
Ms. Roseman pointed out that one company who processes illegal Internet gambling transactions may also transact legitimate transfers which should not be blocked, thus making it almost impossible, or at least very difficult, to determine how to block illegal online gambling transactions.
Rep. Barney Frank, Head of the Financial Services Committee, also posed questions to Ms. Roseman that she could not give exact replies to. Ms. Roseman and Ms. Abend both were eager to point out how they are trying hard to comply with the law, but both were stumped on many questions as to how the banks could enforce it.
The one supporter of the proposed regs, Rep. Bachas, supplied a list of 45 State Attorneys General who opposed federal laws that overruled state laws. Rep. Frank pointed out that in his new law, the Internet Gambling Enforcement and Regulation Act, there is a stipulation that allows individual states to opt out of allowing Internet gambling, thus appeasing the Attorneys General concerns.
Also of great concern to at the members at the Hearing was the issue that the law was passed for moral reasons, yet it allowed for gambling via the Internet on horses. Rep. Frank pointed out to the committee, that betting on horses is also gambling, so it too should be considered immoral and thus banned.
For analysis and reports on the second panel portion of the Hearing, stay tuned to Casino Gambling Web. The second panel discussions will begin shortly and end later in the day.