New Bill May Legalize Online Gambling
August 1st, 2010by Anthony Wayne
By a 41-22 vote, a House Banking Committee has passed new legislation, authored by Barney Frank (D-MASS), that may pave the way for regulation of online gambling in the United States. 
Frank received approval and endorsement from Democrats, but also from Republicans like Jim Gerlach (R-PA). Online poker is not a crime,” said Gerlach.
Under the new legislation, internet gambling would be legal, licensed, and taxed with US land-based casinos having the inside track on the lucrative online opportunities.
Land-based casinos approving of online casinos? What gives? Wasn’t it the land-based casinos that fought legal internet gambling all these years?
That’s all changed. Harrah’s has had great experience with online gambling on the international scene and it, for one, wants to get started online in the USA.
With State and Federal governments dealing with significant deficits, there may be no better time for this type of legislation to pass. Taxes generated by legalized online gambling would be $42 billion at the federal level and $30 billion at the state level over the next ten years. Frank’s new legislation would send 2% of all deposits to the federal government and up to 6% to state governments. Conservative states could opt-out of the new opportunity if they desire to not participate.
The new legislation would favor already operating US land-based casinos and effectively eliminate the entrepreneurs that pioneered the online gambling industry. That’s not to say that there wouldn’t be interest in the current operators. It would make sense that the current operators have very valuable customer lists that the new online big wheels may wish to contact for immediate customer penetration.
The new bill also takes into consideration the 2006 UIGEA that restricts financial institutions to block transactions between internet gambling sites and between players. That’s why the new Frank legislation would only allow deposits from debit accounts, not credit card accounts.
In addition, the bill does not permit gambling on sports which has been actively opposed in the USA on many fronts, especially from lobbyists with the powerful NFL. The bill also includes aspects to deal with problem gambling which should be a given in any legislation.
Online poker has the best opportunity to gain approval. In fact, California has already drafted legislation to permit internet poker. And, as a legitimate “game of skill” it has more features that would consider approval over other internet gambling games that are simply games of chance. It certainly has more aspects of a game of skill than wagering on fantasy sports and horse racing which has already been approved.
Now, the question becomes when the new legislation will be considered. While the timing is good from the standpoint of governments looking for new revenue sources, it’s bad from the standpoint of the upcoming November election which may create an influx of new conservative Republicans. Moreover, Congress closes in August and operates under a limited September schedule.
The best thing that could happen for the Frank bill is to have it tacked onto a must-pass piece of legislation prior to the November election. After all, that’s exactly how the anti-online gambling bill (UIGEA) was passed in the first place.










