U.S. Congress Moves To Legalize Online Casinos

The legislation was sponsored by Rep. Barney Frank (D-MA), the committee’s chairman. The House Financial Services Committee on July 28 voted 41 to 22 on a bipartisan basis in favor of the Internet Gambling Regulation and Consumer Protection and Enforcement Act (H.R. 2267).

The bill now goes to the full House ,and Speaker Nancy Pelosi (D-CA) will have to schedule a vote.

The proposal will legalize online poker and other non-sports betting, creating an estimated multibillion-dollar U.S. market for Internet wagering and generating up to $4 billion a year in taxes and regulatory fees for the U.S. government if it becomes law.

It also would take the place of an earlier Congressional ban on U.S. banks using financial instruments, like credit cards, to pay American Internet gaming operations. That law was passed in 2006, but only took effect this year. The ban has prompted millions of Americans to wager with offshore Internet casinos.

Frank’s bill would require licensed operators to adopt safeguards to protect against underage and problem gambling. It would also require the Treasury Department to license and regulate Internet casinos.

A companion bill, the Internet Gambling Regulation and Tax Enforcement Act of 2010 (H.R. 4976), introduced by Rep. Jim McDermott (D-WA), would empower the IRS to tax online casinos. Individual players would be required to pay taxes on winnings.

The committee’s minority leader, Rep. Spencer Bachus (R-AL), warned that the bill would put virtual casinos on every iPhone and every laptop. Frank defended his bill as a matter of individual rights to privacy and adults’ rights to any form of entertainment that does not harm others.