Internet Gambling To Be Legalised In the U.S

It might be a very long shot in the dark, but there is a distinct possibility that the US Congress might allow internet gambling once again in the US.  The existing ban has been lifted somewhat the previous month by The House Financial Services Committee; this will enable the full House to at least vote on the bill irrespective of stern opposition from the Republicans.

The US government is in dire need of cash; as a result of the ensuing recession in the country it has become rather difficult to always turn a blind eye, especially if billions of dollars are at stake in potential tax revenue.  According to the Congress’ Joint Committee potential revenue that could be harnessed in tax revenue within the next 10 years could be as much as $40 billion.

In comparison with a deficit of trillions of dollars this figure is minute, however at the end of the day every single penny counts.

Better known as the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R.2267), this bill is championed by Rep. Barney Frank (D-Mass.) would be responsible to draft a federal regulatory and enforcement authority that would license gambling operators that will allow bids from consumers in the United States.

“Internet gambling would now be legalized for adults to participate in” Frank said in a recent televised interview on the Jay Leno Show. “Strictly speaking this will allow individuals to play internet poker, it’s now illegal.  Frank stipulated that he couldn’t understand why the government makes it its business, in short the government could generate billions of dollars by legalizing, controlling and taxing it.”

Frank’s bill necessitates that internet gambling operators must have the proper systems in place to ensure that underage gambling, money laundering; gambling addiction and fraud is properly and effectively policed and apply restrictions on types of gambling prevented by states, and Indian Tribes.”

Since October 2006, internet gambling has been to a very large extent been banned in the US when Congress issued the Unlawful Internet Gambling and Enforcement Act (UIGEA).  The general public reckons the law is impotent and has cost the government the loss of billions of dollars in tax revenue-so why enforce it?  Even if it’s still been prohibited, gambling like other vices such as drugs, prostitution even though it’s illegal will always continue to take place.

Of late the Federal Government have been moving aggressively against financial organizations linked internet gambling, utilising the provisions of the Unlawful International Gambling Enforcement Act (UIGEA), which came into play in June.  Enforced in 2006 this Law’s sole purpose is to prohibit internet gambling by means of stopping credit card companies and banking institutions from processing financial transactions for unlawful internet gambling.

The previous week Goldwater Bank in Scottsdale, Ariz. agreed to relinquish $734,000 in assets tied to money laundering and illegal internet gambling organizations, this according to the FBI.  The financial institution was guilty in wiring money for a number of internet gambling sites of which was Pokerstars biggest poker room on the planet.  According to a federal investigation at least $13 million was wired in the first half of 2009.

“The bank,  Goldwater Bank denies its involvement by means of supporting an unlawful internet gambling site and that it has been compensated handsomely to conduct transactions that were important to the operation of this criminal network,” according to a statement released by Janice Federacy, the FBI’s Assistant Director in charge. “In essence the bank won’t receive any form of financial compensation for services rendered.”

Underground, Under-Regulated

To conclude, since it ban internet gambling has been forced underground, critics say.  The majority of websites have ceased to accept campaign advertisements advertising for gambling sites and credit card issuers are not processing payments from internet gambling sites within In contrast to this is gambling is legal in much of the rest of the world, internet sites continue to function and US citizens armed with a keyboard and a mouse can easily access it.  The stark reality to this is; should the Republicans gain the upper hand in this upcoming midterm elections all bets are off.  Some opposition members feel that the government should stay out of its citizens’ private lives and mind their own business.

The committee voted to approve Frank’s bill 41-22, with one member voting present. The final score is below:

Call it a long shot, but there’s a chance Congress could vote to legalize online gambling. The House Financial Services Committee passed a measure that would lift the existing prohibition last month, making it at least possible the full House could vote on the bill despite opposition from Republicans.

With the government scrambling for funds, it’s becoming increasingly difficult to look the other way as billions of dollars in potential tax revenue slips away. Congress’ Joint Committee on Taxation estimates legalizing online gambling could bring in more than $40 billion in new tax revenue over the next decade.

Stacked up against a deficit in the trillions, that might not sound like much but a few extra billion here and there certainly couldn’t hurt.

Officially known as the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R.2267), the bill sponsored by Rep. Barney Frank (D-Mass.) would set up a federal regulatory and enforcement authority that would license gambling operators to accept bids from consumers in the United States.

“We now make it illegal for adults to gamble on the internet,” Frank said in a recent appearance on the Jay Leno Show. “If you have some guy who wants to play poker on the Internet, we say it’s illegal. Why [anybody] thinks that’s the government’s business is beyond me. We could make billions of dollars a year by making it legal and taxing it.”

Under Frank’s bill, gambling sites would be required to maintain “effective protections against underage gambling, compulsive gambling, money laundering and fraud, and enforce prohibitions or restrictions on types of gambling prohibited by states, and Indian Tribes.”

Online gambling has been illegal ever since October 2006, when Congress passed the Unlawful Internet Gambling and Enforcement Act. There are those who say the law hasn’t done much other than starve the government of tax revenue, since gambling — like drug usage, drinking, prostitution, rolling past stop signs and other human vices — continues to occur, even when it’s illegal.

Lately, however, the feds have been moving aggressively against financial institutions tied to online gambling, using the provisions of the Unlawful International Gambling Enforcement Act (UIGEA), which went into effect in June. The law, passed in 2006, aims to stop online gambling by preventing credit card companies and banks from processing funds transfers for unlawful internet gambling.

Just last week, Goldwater Bank in Scottsdale, Ariz., agreed to forfeit $734,000 in assets tied to money laundering and illegal online gambling operations, the FBI said. The one-branch bank was accused of transferring funds for several online gambling sites, including PokerStars, the world’s largest online poker room. At least $13 million was transferred in the first half of 2009 according to federal reports.

“Although Goldwater Bank denies guilty knowledge of its role in facilitating an illegal online gambling business, it was paid to execute transactions that were essential to the operation of this criminal enterprise,” said Janice Fedarcyk, the FBI’s Assistant Director in charge, in a statement. “The forfeiture settlement means the bank won’t profit by providing this service.”

Underground, under-regulated

Prohibiting online gambling has simply forced it underground, critics say. Most Web sites have stopped accepted advertising for gambling sites and credit card issuers have stopped processing payments from gambling sites located in the U.S. But since gambling is legal in much of the rest of the world, online sites continue to operate and can be easily accessed by any American armed with a keyboard and a mouse. The problem, as Frank and others see it, is that without effective licensing and regulation, U.S. gamblers lack even the most basic protections.

Of course, all bets could be off if the Republicans gain control of the House in the upcoming midterm elections, since most of the opposition to legalized gambling comes, oddly enough, from conservatives who say government should stay out of citizens’ private lives. There’s also opposition from some but not all casinos.

The committee voted to approve Frank’s bill 41-22, with one member voting present. The final tally appears below.