The Unlawful Internet Gambling Enforcement Act (UIGEA), approved by Congress in 2006, prohibits gambling businesses from accepting payments in connection with unlawful internet gambling, including payments made through credit cards, electronic funds transfers, and checks. But the legislation, which has yet to be fully implemented, is facing challenges to its legality.

Under the proposed rule, US financial firms that participate in designated payment systems will be required to "have policies and procedures that are reasonably designed to prevent payments being made to gambling businesses in connection with unlawful internet gambling," the agencies explained in a statement.

The statement went on to confirm that unlawful internet gambling generally would cover the making of a bet or wager that involves use of the internet and that is unlawful under any applicable federal or state law in the jurisdiction where the bet or wager is made.

The Board and Treasury are required by the Act to develop jointly the proposed rule in consultation with the Department of Justice. The proposal also requests comment from the public by December 12, 2007.

The implementation of the legislation is intended to clarify the legal situation surrounding internet gambling in the US, in the light of a court challenge by the Interactive Media Entertainment and Gaming Association, which filed a suit in June challenging the law's constitutionality.

The US government is also facing mounting pressure for compensation from some of its trading partners, including the EU, after abrogating one of its WTO treaty commitments to sidestep a ruling by a WTO dispute panel in favour of Antigua & Barbuda, which has challenged US efforts to ban internet gambling.