April 26, 2007 10:42 AM PDT

Democrat proposes lifting federal ban on Net gambling

Just six months after President Bush signed a law outlawing online gambling, a key Democratic politician has proposed lifting the ban.

Rep. Barney Frank, a Democrat from Massachusetts and chairman of the House Financial Services Committee, on Thursday introduced a bill that would replace the current broad prohibition with strict regulations, including criminal background checks and financial disclosure, imposed on companies that seek to offer legal Internet gambling.

"The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone," Frank said. His bill is called the Internet Gambling Regulation and Enforcement Act (PDF).

Barney Frank
Rep. Barney Frank

Last year's legislation tried to eliminate many forms of online gambling by targeting Internet service providers and financial intermediaries, namely banks and credit card companies that process payments to offshore Web sites.

Those sites included ones like BetBug of Toronto; BetWWTS.com of Antigua; Bodog Sportsbook, Casino and Poker of Costa Rica; and Betfair, which has offices in London. Estimates typically put Internet gambling revenue at more than $12 billion a year.

The bill never received a formal up-or-down vote in the entire Congress. Instead, Republican congressional leaders have been criticized for gluing it onto an unrelated port security bill. The Senate unanimously approved the port security measure and it cleared the House of Representatives with only two dissenting votes.

Frank argues that because nearly all states already permit some form of traditional gambling--including lotteries, betting on horse and greyhound racing, and sports wagering--the federal government should legalize and regulate the online equivalents. Instead of a blanket legalization, his legislation would require the Treasury Department to police the industry and ensure that it takes adequate steps to identify minors and compulsive gamblers.

The World Trade Organization ruled in March, for a second time, that the U.S. ban on gambling violates international trade rules and sided with the Caribbean nation of Antigua and Barbuda. But the tiny nation has little leverage to force any changes to federal law.

There are signs that the 2006 Net gambling ban has had an impact on the industry. In November, the British site BetOnSports agreed to cease signing up U.S. customers. BetOnSports' founder, Gary Stephen Kaplan, was arrested earlier this month in the Dominican Republic and faces criminal charges in the United States. In addition, payment processor Neteller in February said it would cut about 250 jobs as a response to the gambling crackdown.

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22 comments

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Nothing but downside here
Frank is just wrong on this one. Casino gambling spawns large service economies with jobs and tourist dollars and takes place in a controlled environment where problem gamblers and cheaters can be weeded out. Online gambling has no trickle-down anywhere, it's just a straight pipeline from the credit cards of problem gamblers into the pockets of offshore gangsters, with no tips for cocktail waitresses in between. Uncle Sam won't even see all of the tax revenue he might be hoping for because a lot of the operators will be offshore or criminals. People can gamble legally in casinos in most states, so nobody can moan about being prevented from choosing to gamble. The state has an interest in keeping this kind of activity under controlled conditions...
Posted by Razzl (1318 comments )
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Respectfully, Thats BS
You are making the assumption that all internet gambling sites will be hosted elsewhere. There is no reason to prevent U.S. companies from opening their own internet casinos. Or for that matter, foreign casinos that agree to play by the rules like Bet on Sports should be allowed. The real reason for the ban was because Congreds was pandering to the Religious Right, who claim gambling is evil.

Looked at in that way the current ban is unconstitutional.
Posted by PzkwVIb (462 comments )
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GAMBLING WRONG
Is it just me or is this just a sad reminder that our country (U.S.) has lost it's morals? I was always brought up that gambling of any sort was and still is wrong. It does nothing but create greed and sin. Not to mention people who become addicted and the continuation of the decay of society.

I for one am happy that internet gambling was banned. Now it should be on to wiping online pornography off the net.

For the WTO to say the U.S. is in violation of free trade? Who the F do they think they are to tell the U.S. that we should allow something that is wrong so others can make money?

GET IT RIGHT PEOPLE: GAMBLING IN ANY FORM IS WRONG!
Posted by pchesels (20 comments )
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Why
We are not a theocracy and many of us find nothing immoral in gambling. Please refrain from trying to legislate your religion as it is immoral, illegal, and unconstitutional to do so.
Posted by PzkwVIb (462 comments )
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You're a complete and utter moron.
<eom>
Posted by anarchyreigns (299 comments )
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Though it's early yet...you should see through this...
...and I haven't seen anyone bring this up, so here goes.

You do realize, of course, why BF wants to "legalize" internet gambling, don't you? Hint: he's from Taxachusets, oops, I mean Massachusets, right? You know the next step is to tax the gamblers and the U.S. firms that host it (which will THEN cause them to move offshore, or at least those that were too stupid to start out offshore). The only reason to legalize it from Franks' point-of-view is to make it a source of revenue, as he has everything else he's thought of legislation to "regulate". If it's legal, then it's taxable. Why stop at e-gambling? Why not, then, e-commerce (even E-bay sales)?

C'mon, folks, even this early in the game you should see through the Honorable Democrat from Massachusets! Ask anyone who's ever lived there!

My $2.00 worth (.02 plus tax, gov't fees, etc...)
Posted by TransplantGuy (249 comments )
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Get your facts correct before posting article
As a poker player and a Republican I was very upset by Declan McCullagh's story on the lifting of the federal ban on net gambling due to the mis-representaion of the facts in his story. Yes, President Bush signed a law outlawing online gambling but only because it was "glued" to the Port Security Bill. He stated "Republican congressional leaders have been criticized for gluing it onto an unrelated port security bill". In truth it was two DEMOCRATS from the west coast who "glued" it to the Port Security Bill a matter of hours before the vote allowing no time for debate on the law. It was the Republicans who blasted these two Democrats for the way they slipped it in. Mr McCullagh should research his facts before he commits them to print. Also, alot of Republicans and democrats have been calling for the repeal of the law or of changing the wording of this bill. The article makes it sound like Mr. Frank is the first to do so.

John Sirko
Posted by John Sieko (2 comments )
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I appologize to Mr. McCullagh
I want to apologize to Mr. McCullagh for my previous blog. I was given the wrong facts about who glued the net gambling law to the port security bill. Upon checking more into it, I was embarrassed and ashamed to discover that it was actually a small group of Republicans that railroaded this through. I again want to apologize to Mr. McCullagh. His article was right on about the Republicans being criticized. I guess I had better triple check what I am told next time.
John Sirko
Posted by John Sieko (2 comments )
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Banning internet gambling seems like a pretty selfishly motivated (monetarily) act. Here is an interesting article about why some European countries have been banning internet gambling recently: http://www.mindreign.com/en/mindshare/Global-Economics/Government-Hold-Em/sl35291137bp321cpp10pn1.html
Posted by TressorJ (6 comments )
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