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U.S. Congress Moves To Legalize Online Casinos

Posted On: 8/2/2010

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Internet Gambling Regulation and Consumer Protection and Enforcement Act, Internet casino, Internet gaming, video gaming, Barney Frank

WASHINGTON -- 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 legislation was sponsored by Rep. Barney Frank (D-MA), the committee's chairman.

The bill now goes to the full House where it will be up to Speaker Nancy Pelosi (D-CA) to schedule a vote.

If it becomes law, 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.

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

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 also pay taxes on winnings.

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. The committee's minority leader, Rep. Spencer Bachus (R-AL), warned that the bill would put virtual casinos on "every iPhone and every laptop."