US House of Representatives Panel Passes Measure to Legalize Internet Gambling

A House committee yesterday approved legislation legalizing some forms of Internet gambling, allowing U.S. residents to place online wagers with licensed companies.

The measure, which was sponsored by Representative Barney Frank, would roll back a law designed to make such online gambling illegal. That four-year-old law which took effect in June, prevented banks from processing payments to offshore gambling websites. “My primary goal is Americans ought to be free to do what they wish without this kind of intrusion,” said Frank, a Massachusetts Democrat whose committee passed the legislation 41-22. “We do know that gambling will go on in America,” he told the panel.

Both Democrats and Republicans supported the bill in yesterday’s committee vote. The bipartisan backing adds momentum to the legislation, said John Pappas, executive director of the Poker Players Alliance. The focus now shifts to the legislation to tax the betting, which is before the House Ways and Means Committee, he said.

Critics of the 2006 law designed to bar the wagers also say it makes no distinction between legal and illegal online gambling. Some states allow online gaming on horse and dog racing, for example. In addition, there has been a move by several US States to legalize gambling through online casinos.

Frank and other proponents, such as the Poker Players Alliance, say licensing and regulating online gambling will protect consumers, a growing number of which are placing bets with offshore operators. The U.S. offshore Internet gambling market is expected to climb to $5.7 billion in 2014 from $5.4 billion last year. If legalized by the US, the market could grow to $24 billion in five years.

A separate measure that depends on full House passage of Frank’s plan would impose taxes on online poker and other Internet gambling, bringing the federal government as much as $42 billion over 10 years.