U.S. Congressman Barney Frank last month introduced his long-awaited, and much-hyped, internet gambling bill. It isn’t exactly what Unlawful Internet Gambling Enforcement Act opponents had hoped for.

Reports had been circulating that Frank, the House Financial Services Committee Chairman, would introduce legislation that would repeal the UIGEA, which prevents U.S. banks and credit card companies from processing payments to online casino operators located outside the U.S.

Frank has railed against the UIGEA since it was sneaked into an unrelated Port Security 15 minutes before that bill was scheduled for a vote and just hours before Congress adjourned last October. The Port Security was a must-pass bill. He called the bill “a great mistake” and “one of the stupidest laws ever passed.”

Frank’s legislation, called the Internet Gambling Regulation and Enforcement Act, would leave the UIGEA and Wire Act in place, and banks and credit card companies would still be prohibited from doing business with illegal online operators. The new legislation would, however, establish a federal licensing and regulatory procedure for offshore internet gambling operators.

The bill gives the Financial Crimes Enforcement Network the authority to issue and enforce licenses and regulations. It would require license seekers to establish a corporate structure in the U.S. for taxes and fees.

The legislation requires companies pay the U.S. government a 1 percent license fee and 1 percent user fee based on the amounts deposited by customers for each 30-day period of operation.

The bill also requires companies have appropriate safeguards in place to protect against underage gambling, problem gambling and money laundering before accepting wagers from U.S. residents. Licenses will be renewed each year, and companies that fail to comply with regulations or any other U.S. laws can have their licenses revoked.

States can opt out of regulated gambling if they like, and sports leagues that don’t want wagering on their product can also opt out. Native American tribes are also given the same rights as states as pertains to online gaming.

Frank was championed by many who support the taxation and regulation of the online gaming industry, including the millions of Americans who want the freedom to once again play online poker. The lawmaker, however, said his legislation has nothing to do with poker or any other game.

“This is about freedom,” he said. “I’m not just concerned with poker. What’s next? Mahjong?

Frank still needs to round up support for his new bill, for which he currently only has 11 co-sponsors. “The votes aren’t there to change it right away,” he said.

Officials with the four major professional sporting leagues and the National Collegiate Athletic Association are lobbying members of Congress to reject Frank’s legislation, urging lawmakers in an April 25 letter to “reject proposals to reverse itself on this issue.”

“Our sports organizations each have strict policies against sports betting because wagering on sports can corrupt athletic contests or create the appearance of corruption,” the letter said. “If online poker or lotteries or other forms of restrictions are legalized, a major trading partner such as the European Union may be able to get the World Trade Organization to rule against all U.S. gambling restrictions.”

The WTO has already ruled against the U.S., multiply times for already existing exemptions allowing online wagering on horse racing while prohibiting other forms of online gaming.

By Greg Jones

Greg Jones is managing editor of Casino Connection Nevada, as well as associate editor of Global Gaming Business magazine.

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