Bill to Legalize Online Casinos: Barney Frank Seeking Winning Hand

May 26, 2009

(ChattahBox)—Online gambling sites are banned from operating in the United States, and yet the vast majority of players found in Internet casino rooms of offshore gambling websites are Americans.

Democratic Representative Barney Frank, Chairman of the House Financial Services Committee, wants to change the shadowy quasi-legal activities of the online gambling industry, by introducing a bill to legalize, regulate and tax the industry.

Online Casinos have been banned in the U.S. since the 2006 Unlawful Internet Gambling Enforcement Act, or UIGEA was slipped into a SAFE Port Act, signed into law under the Bush administration, prohibiting financial institutions from accepting payments from credit cards, checks, or electronic fund transfers to settle online wagers.

The UIGEA regulations don’t define “unlawful Internet gambling,” leaving the industry in a state of flux. After enactment of the UIGEA, numerous online casinos banned U.S. players from their sites, but dozens more still cater to U.S. players.

The UIGEA also put into play a new criminal activity for federal and state law enforcement, as well as banks, requiring the monitoring of illegal financial transactions flowing to and from offshore Internet casinos.

Rep. Frank’s bill would do away with the UIGEA ban, as well as regulate and license the online casinos by the Treasury Department that allow U.S. players, by instituting safeguards for players and taking steps to keep minors out of the online casinos.

There is the additional benefit of increased tax revenue for the United States. The current online casino operations operate outside of U.S. jurisdiction, depriving the U.S. of much needed tax revenue during these tough economic times.

Essentially, billions of dollars are spent in unregulated online gambling sites and the United States doesn’t see a penny of it. Democratic Rep. Jim McDermott, introduced a bill similar to Frank’s last year, and he estimated then the U.S. stood to gain approximately $40 billion in revenue over the next 10 years.

Rep. Frank also first introduced a bill to legalize online gambling in 2007, that didn’t pass. Unlike his first bill, Frank’s current bill prohibits sport betting. However, four major professional sports leagues and the National Collegiate Athletic Association have strongly opposed Frank’s bill, believing it would encourage online sport betting.

Republican Rep. Spencer Bachus of Alabama, a ranking member of the House Financial Services Committee is leading the charge for conservative opponents who believe the legalizing of Internet gambling would cause young people to become addicted to gambling.

The Poker Players Alliance and other online casino lobbying groups are in full support of the bill, believing it would clean up the industry’s image and expand its customer base. But land-based casinos are not generally in favor of legalizing online gambling, believing such a move would cut into their business.

Democratic Senator Harry Reid, the Senate majority leader of Nevada represents a state where gaming is essential to its financial health and is not expected to support a bill to legalize online casinos, if his constituents strongly oppose it.

Rep. Frank contends online gambling should be legal as a matter of personal liberty. He plans to move the bill through his committee before the Congressional break in August.

Source


Comments

4 Responses to “Bill to Legalize Online Casinos: Barney Frank Seeking Winning Hand”

  1. Old Man Dotes on May 27th, 2009 12:18 am

    Did the Government learn NOTHING from Prohibition? Make something that many, many people want illegal, and they’ll get it anyway – but you can’t tax it. Now we have a powerful Mafia due to the original Prohibition, violent armed gangs due to the current drug prohibition, and massive online-offshore gambling – also untaxed because it’s prohibited.

    And they wonder why the National Budget is always short of money. Duh!

  2. Josh on May 27th, 2009 6:09 pm

    Why is it that brick and mortar casinos are completely missing the point? Wake up Harry Reid! Wake up native american casinos! Online gaming and poker introduce the game to thousands of newcomers that would otherwise feel to intimidated to enter a brick and mortar casino and sit down at the table. Gradually as they learn the game they venture out to the brick and mortars. When the UIGEA was passed in 2006, the customer base in casinos, especially poker rooms, dropped dramatically. Even the WSOP was lessened. Bring online casinos back to the US and you will bring back all the new players and the future new players. It will also give the brick and mortars the opportunity to make their own online casino site and increase income through the wondrous internet. By opposing this Harry Reid and Las Vegas are thinking completely backwards.

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