Barney Frank to Introduce Internet Gambling Legislation after April 20th

In a recent interview with The Hill, Congressman Barney Frank (D-MA) stated that he plans to introduce internet gambling legislation after the Easter recess. The Hill noted that the week of April 20th is a likely time frame.

Frank’s bill, which may create a complete licensing and regulatory framework for the internet gambling industry, will not be a rider to critical legislation, according to The Hill, which claimed, “The main proponent of a bill to regulate Internet gambling will introduce his legislation as a standalone bill and will not seek to add it to must-pass legislation.” Frank told the Washington, D.C. publication, “I want to do this with hearings, discussions, and votes.” The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in the waning moments of the 2006 Congressional session. It was not discussed in the Senate and instead approved by unanimous consent and attached to the SAFE Port Act.

Frank had originally indicated that he would introduce internet gambling legislation in March. However, an ongoing economic meltdown has hindered other bills from being introduced and addressed. Frank is the Chairman of the powerful House Financial Services Committee, whose industry members like banks and credit card companies have been ravaged by the struggles on Wall Street and around the world. Consequently, the timeline for the introduction of a standalone internet gambling bill has been delayed. Frank told The Hill, “After the break, definitely in April.”

Frank has long been a proponent of internet gambling on Capitol Hill. He was the author of HR 2046, the Internet Gambling Regulation and Enforcement Act, which was introduced in April of 2007, but was not acted upon and now must be reintroduced for consideration. The bill attracted 48 co-sponsors. Last September, the House Financial Services Committee approved HR 6870 by a 30-19 vote, the second version of the Payments System Protection Act, which would have clarified what was legal and illegal under the UIGEA. However, the collapse of the global economy occurred shortly thereafter and the bill was placed on the backburner.

Although a final text of Frank’s new legislation has yet to be released, The Hill speculates on what it may entail: “Frank’s bill would remove the ban on Internet gambling, which Republicans fought hard to institute after heavy lobbying from conservative Christian groups when they controlled Capitol Hill. His legislation would regulate the practice as well as tax it, providing new revenues for the federal government.” A recent study released by PricewaterhouseCoopers revealed that taxing and regulating the internet gambling industry may yield up to $52 billion in revenue for the U.S. Government over a 10 year period. The figure is ultimately contingent on whether professional sports leagues choose to allow betting on games.

Some have argued that a bill that legalizes only online poker would stand a better chance of being passed than would a multi-faceted approach like Frank’s. In July of 2007, Congressman Robert Wexler (D-FL) introduced HR 2610, the Skill Game Protection Act, which would have exempted poker, bridge, chess, mah jong, and other player versus player games from the UIGEA and Wire Act. The bill created an important distinction between online casinos, where the action is primarily player versus the house, and online poker, where contestants battle against each other. Like HR 2046, HR 2610 was not acted upon during the previous Congressional session and must now be reintroduced.

The regulations of the UIGEA went into effect on January 19th as a “midnight rule” by the outgoing Bush Administration. Banks and other financial institutions must come into full compliance with the law by December 1st. In the meantime, over-blocking of transactions by Visa and MasterCard has led to complications for state lotteries in North Dakota and New Hampshire, where customers attempting to purchase tickets online are being declined.

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