July 29, 2010 (CAP News Wire) – After years of work on regulating online gambling on a federal level, Barney Frank’s efforts to overturn the UIGEA have reached an important milestone: The bill (H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act) yesterday was approved by the House Financial Services Committee and can now move on to full congressional voting.

“Lawmakers on the House Financial Services Committee voted 41-22 to approve the legislation, meaning it could be brought to the floor by House Democratic leadership,” reports the Wall Street Journal.

And in getting the bill passed, the aides of the House Democratic supporting the bill have admitted that, like the UIGEA before it, the bill will probably be attached to “a larger, must-pass bill later in the year, rather than bringing it to the House floor as a stand-alone measure” — much like the UIGEA was passed only by its connection to the SAFE Port bill back in 2006. 

Admittedly, this is only the first, relatively small step in a much larger campaign. The bill, which is “backed by banks and credit unions but have divided casinos and American Indian tribes — are far from becoming law,” writes Sewell Chan at the New York Times. “A bill to legalize online poker sponsored by Senator Robert Menendez, Democrat of New Jersey, has not yet had a hearing. The Congressional timetable has little spare room before the midterm elections, and the Obama administration has not taken a position.”

Still, it’s more progress than the issue has seen in a long time. And it’s also significant that the bill is being introduced by the House Financial Services Committee. That means that the biggest likelihood of selling this bill to congressional members will be based on the economy, and the importance of taxing online gambling given the poor economy of the United States.

“While debates on this subject often focus on the moral implications of gambling, that has never been the government’s interest,” states the Washington Times. “A total of 42 states goad low-income residents into trading their hard-earned cash for illusory dreams of a better life through the lottery, generating $25 billion a year from their deception. Twenty-eight states permit operation of Indian casinos that haul in an additional $27 billion in revenue. A dozen states allow Las Vegas and Atlantic City-style casinos that hand over $5.7 billion in taxes to state bureaucracies each year, according to Congress’ Joint Committee on Taxation.”

“The bill would direct the Treasury Department to license and regulate Internet gambling operations, while a companion measure, pending before another committee, would allow the Internal Revenue Service to tax such businesses,” Chan continues. “Winnings by individuals would also be taxed, as regular gambling winnings are now. The taxes could yield as much as $42 billion for the government over 10 years, supporters said.”

The bill is designed to not only regulate online gambling financially, but also with an aim to secure player safety. As it now stands, the bill would create a strict licensing system for online casinos and Internet poker rooms doing business in the U.S., as well as implementing software standards and limits on what players can bet (and/or lose) in a given time period.

And, true to his reputation of completely misunderstanding the realities of the situation, Internet gambling opponent Spencer Bachus said: “With this bill, in one broad stroke, we will allow every child in America to gamble on their home computer or in their dorm room.” (Per Bloomberg.)

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