US One Step Closer to Legalizing Internet Gambling

A bill has passed through the House in the United States that could lift the ban on internet gambling that was brought about by the UIGEA (Unlawful Internet Gambling Enforcement Act).

The House Financial Services Committee approved the legislation in a vote of 41-22. The bill could now be brought to the House Democratic leadership. Democrats could add the bill to a larger bill sometime this year.

If the bill is passed, online gaming websites would be allowed to return to US soil. Online games like poker are currently banned in the United States but many Americans are still playing. Those online gaming sites like PokerStars and Full Tilt Poker are not located in the US, but rather overseas in countries like Isle of Man and the United Kingdom.

The UIGEA was originally passed in 2006 as a part of the Safe Port Act and it banned ‘unlawful internet gambling’. That measure made it illegal for banks and credit cards to process funds to online gambling companies.

This bill has been the pet project of Rep. Barney Frank of Massachusetts. Rep Frank has campaigned for a reversal of the UIGEA for years. Companies that want to participate in offering online gaming to US players would have to be based in the US under the terms of this bill. Sportsbetting online would not be part of the bill and would therefore still be illegal.

Some Republican remain strongly opposed to the bill. They argue that removing the ban would encourage gambling by minors contribute to addictive behavior.

There is also a separate push to tax online-gambling proceeds. The bill by Rep. Jim McDermott (D-Wash.) has not been approved by the House Ways and Means Committee.

Taxing online gambling proceeds could raise up to $42 billion over the next decade, according to an estimate by the Joint Tax Committee.

News Added: 29 July, 2010

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