by Regulation GG, also known as the “Unlawful Internet Gambling Enforcement Act,” is a federal regulation that applies to financial institutions and payment processors and is intended to prevent illegal internet gambling by making it difficult for illegal gambling businesses to process payments through the U.S. financial system.
The regulation applies to financial institutions and payment processors, including banks, credit card companies, and money transfer businesses, and requires them to establish and implement procedures to identify and block restricted transactions. Restricted transactions include those in which a customer directly or indirectly funds illegal internet gambling.
The regulation also requires financial institutions and payment processors to develop and maintain a compliance program, including policies and procedures to identify and block restricted transactions and to report suspicious activity. Financial institutions and payment processors must also provide training to their employees on the regulation and on how to identify and block restricted transactions.
It is important for financial institutions and payment processors to comply with Regulation GG to prevent illegal internet gambling and to protect the integrity of the U.S. financial system. It also helps to protect consumers from falling victim to illegal gambling activities and to ensure that these activities are not able to use the financial system to launder money or to evade taxes.
Some of the Key provisions include:
- Identification and blocking of restricted transactions: Financial institutions and payment processors must establish and implement procedures to identify and block restricted transactions, which include transactions that involve illegal internet gambling.
- Compliance program: Financial institutions and payment processors must develop and maintain a compliance program that includes policies and procedures to identify and block restricted transactions and report suspicious activity.
- Employee training: Financial institutions and payment processors must provide training to their employees on the regulation and on how to identify and block restricted transactions.
- Recordkeeping: Financial institutions and payment processors must retain records of restricted transactions and suspicious activity reports for a certain period of time, typically five years, to assist in compliance with the regulation.
- Customer identification: Financial institutions and payment processors must verify the identity of customers before opening an account or before processing a transaction.
- Third-party payment providers: Financial institutions and payment processors are required to take reasonable steps to prevent restricted transactions if they use third-party payment providers.
It is important for financial institutions and payment processors to comply with the provisions of Regulation GG to prevent illegal internet gambling and to protect the integrity of the U.S. financial system. It also helps to protect consumers from falling victim to illegal gambling activities and to ensure that these activities are not able to use the financial system to launder money or to evade taxes.
