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Online gambling bill gets initial OK

Attention all gamblers. Uncle Sam thinks you could help him cover some of his operational costs.

The House Financial Services Committee yesterday approved a bill that would effectively legalize some types of online betting.

Hand gambling online

But bettors shouldn't get too excited. The bill is specifically limited to online poker and other nonsports betting.

And remember, it would also make it easier for the IRS to get its cut of your winnings.

Supporters of the legislation say that could mean as much as $42 billion in additional federal tax revenue over 10 years.

The panel's vote to approve H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act of 2009, would give the Treasury Department authority to issue licenses to and regulate Internet gambling operators.It's the first official counter-measure to 2006's Unlawful Internet Gambling Enforcement Act (UIGEA), which restricted the use of payment options for Americans who gamble online.

A matter of individual financial freedom: Rep. Barney Frank (D-Mass.), chair of the Financial Services Committee and sponsor of the bill, characterized the measure as an effort to protect the freedom of adults to spend their money as they see fit, while providing appropriate consumer protection.

"The bill, which licenses and regulated online gambling, requires licensees to take appropriate safeguards to prevent fraud, money laundering, underage and compulsive gambling," said Frank in an announcement following the Committee's action.

The measure, which was opposed by several states as well as tribal gaming operators, was amended, noted Frank, to clarify the bill's effect on Indian tribes and to require consultation with tribes in the measure's implementation. There also is an exception for intrastate and intratribal online lotteries.

Limits remain: As for possible gambling by young people and compulsive gamblers, Frank said the bill contains "additional, strong protections to prevent minors from gambling online; prevents inappropriate online advertising targeted toward underage or compulsive gamblers; prohibits licensees from accepting bets or wagers from persons on the self excluded list of compulsive gamblers and persons delinquent with child support payments; [and] requires that players set financial loss limits."

And while the bill was seen as a slap at UIGEA, it also prevents the use of a credit card to gamble online.

A turning of a corner? The committee vote was 41 to 22, with seven Republicans joining most Democrats in favor of the measure.

However, given the lateness of this Congressional session and the amount of other issues that must be addressed by year's end, further action this year on the bill is unclear.

Still, the approval is an indication as to what heretofore unacceptable lengths Congress is willing to go in an effort to raise money without raising individual taxes.

"I was looking for the money," Rep. Jim McDermott (D-Wash.) said in an interview with the New York Times. McDermott also has sponsored a companion bill to allow taxation of Internet gambling, with money raised there dedicated to education efforts.

Rep. Brad Sherman (D-Calif.) is thinking along the same lines, noting that "$42 billion over 10 years has an effect." Sherman told the newspaper, "We will not pass an Internet gaming bill. We will pass a bill to do something very important, funded by Internet gaming."

We'll see if such hair-splitting will work within the full House where there's still substantial opposition to all sorts of gambling, regardless of how much money it could provide.

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Online Gambling

It's good to know that online gambling is moving forward to legalization. I've been skeptical before because there might be lack of consumer protections. The legislation deserves a thumbs up for assuring this.


Such a ridiculous piece of legislature. I am positive I can visit various sites RIGHT NOW...THIS SECOND and put in my credit card and start gambling.

I am not sure I have the answer but I tend to side more with legalize and tax.

Dan Ray

Hey, Kay. And if this bill becomes law, you won't be able to plunge your guts out with a credit card. They added an amendment Wednesday forbidding credit cards from being used in online gambling. Debit and prepaid cards are welcome at the virtual poker table, credit cards aren't.

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