Internet Gambling License Considered Today

A licensing program for anyone taking bets on the Internet would be established by a bill receiving a public hearing this afternoon before the House Financial Services committee.

Artwork: Chip Taylor
The measure, which was filed by the chairman of the committee, Barney Frank, D-Massachusetts, and has garnered 69 co-sponsors, would require any entity taking bets from U.S. citizens on the Net to be licensed by the federal government. As much as $40 billion in revenue could be raised by the legislation, which, according to one supporter of the proposed law, could be reported to the House as early as next week.

In 2006, Congress adopted a backdoor approach to regulating Internet gambling through the Unlawful Internet Gambling Enforcement Act (UIGEA). That law, which finally took effect last month after years of administrative delays, makes it illegal for banks and financial institutions to process deposits and withdrawals of U.S. citizens by online gambling sites.

The problem with UIGEA, though, was that it was practically unenforceable. "In short, the law makes credit unions and other financial institutions liable if transactions with illegal Internet gambling providers are approved, but does not provide us with a definition of "unlawful internet gambling," much less a list of illegal Internet gambling providers," Patrick Keefe, a spokesman for the Credit Union National Association told PC World.

What the sponsors of the Frank bill hope to do is clarify who's an illegal gambling provider on the Net. No one knows what UIGEA means by "unlawful Internet gambling transactions," argues John Pappas, executive director of the Poker Players Alliance. "There is no federal definition of what unlawful Internet gambling is," he told PC World

"The [UIGEA] has proven to be completely ineffective at preventing people from playing any game online whether we believe it to be lawful or not lawful," he added. "The only real regulatory reform here is to license it, to try to control it, rather than try to prohibit it."

Today's congressional hearing will take place at 2 p.m. EDT in room 2128 of the Rayburn House Office Building. A live webcast of the forum can be viewed at

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