U.S. House Committee Approves Online Gambling Bill

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Online Gambling in the US The U.S. has taken a leap forward in the process of overturning the highly controversial -Unlawful Internet Gambling Enforcement Act (UIGEA). A bill that would legalize some forms of internet gambling in the U.S. has just passed a vote in The House Financial Services Committee. Spearheaded by the left handed Congressman – Barney Frank (D-Mass.), Bill H.R. 2267 – Internet Gambling Regulation, Consumer Protection and Enforcement Act was approved by a 41-22-1 vote in the House on July 28th.

Bill implications would regulate internet gambling in the United States and require licensed operators to ensure safeguards against underage and rogue gambling. Authority to issue gaming licences are exclusively reserved by the U.S. Department of Treasury, who would also establish regulations pertaining to online gambling.

Much has been considered in regards to the potential economic benefits that regulated online gambling would have for the U.S. and until now, positives steps have not been taken. Proponents of the bill cite a tax revenue analysis by the Joint Committee on Taxation that outlines an expected USD $42 billion in federal revenue over its first 10 years. Additionally, a study by H2 Gambling Capital predicts that Internet gambling would create as many as 32,000 jobs over its first 5 years.

 “The Committee’s bi-partisan vote to approve Chairman Frank’s legislation is nothing short of historic,” says Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative. A conclusive statement made by the Committee recently following the vote: “Congressman Frank’s bill will protect the freedom of adults to spend their money as they see fit, while providing appropriate consumer protection.

Amendments have been made and provide additional measures to prevent minors from gambling, impose restrictions for online advertising, require players to set loss limits, and prohibit “self-excluded” individuals and those who’ve failed to maintain child support payments.

Other key amendments include: 

  • Prohibition of sports betting, except for pari-mutuel racing.
  • Prohibiting the use of credit cards for deposit.
  • Requires all licensed facilities to be located in the U.S.
  • Increased length of time for states to opt out of the legislation from 90 days to one full legislative session.
  • Requires that managers, as well as sites themselves fit licensing requirements.
  • The Treasury will identify specific legal and illegal gambling sites to submit to financial institutions to help enforce the Unlawful Internet Gambling Enforcement Act.
  • Implementing technologies that will validate player’s geographic location.
  • A database of gambling statistics that does not identify individual players must be made available.
  • Requires that random number generators are used.
  • Ensuring that the majority of employee’s are in the U.S. for licensing purposes.
  • Government will order a study on people gambling while impaired.

A complete list of HR 2267 amendments can be viewed here and a breakdown of how members of the committee voted on the bill can be viewed here. Former Senator Alfonse D’Amato and current chairman of the Poker Players Alliance has stated, “The fact is, online poker is not going away. Congress has a choice – it can license and regulate it to provide government oversight and consumer protections, or our lawmakers can stick their heads in the sand, ignore it, and leave consumers to play on non-U.S. regulated websites in all 50 states,” furthermore “I’m glad the Financial Services Committee today overwhelmingly chose to act and protect Americans as well as preserve the fundamental freedoms of adults and the Internet”.

Accompanying Rep. Frank’s proposed legislation, is the Internet Gambling Regulation and Tax Enforcement Act, introduced by Rep. Jim McDermott (D-Wash.) in March, which ensures the collection of license fees and taxes on regulated Internet gambling activities. The vote by the House on July 28th constitutes a monumental step in reforming previous regulations set by the UIGEA. The bill however, has not been passed into law just yet; there remains several obstacles to overcome before the proverbial bets can be placed.

To begin, the entire House must vote on the bill which isn’t likely to happen before the August 9th break or during the benign congressional sessions held after the November elections. This would constitute a full floor vote taking place between 9/7 and 10/8 of this year, which means that Democratic Leadership led by House Speaker, Nancy Pelosi (D-Calif.), would need to get something on the books — double time!

When, and if the House approves the bill, it would then need to be taken up by the Senate. If it’s passed by both the House and Senate, then and only then, would it be dispatched to President Obama for his signature. This all needs to happen before the end of the 2010 legislative session; if not, the shenanigans will start anew in 2011 when the internal structure of both the House and Senate could prove to be very different indeed.

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