Will Online Gambling Become Legal In The US? The “Internet Gambling … Act” Passes A House Committee

The Internet Gambling Regulation and Consumer Protection and Enforcement Act, HR 2267,  which would legalize online gambling in the United States, passed the House Committee on Financial Services last week.

The committee voted in favor of the bill,  41-22 advancing the legislation to the House floor.

The bill sponsored by Rep. Barney Frank (D-Mass.) chairman of the House Financial Services Committee, would effectively legalize online poker and online casino games such as blackjack, slots, table games  and other non-sports betting in the United States.

One analysis completed by the Congressional Joint Committee of Taxation concluded that regulated online gambling could generate $42 billion in revenue over the first 10 years of HR 2267 implementation at the federal level.

If HR 2267 is signed into law, sites will have to apply for federal licensing.

The Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267) requires that in order for an operator to qualify for a license, the applicant must demonstrate they have established and can maintain the following requirements, at minimum:

• Consumer protections – Safeguards to ensure the individual placing a bet is of legal age to gamble and there are protections to combat compulsive gambling, including a requirement for licensed operators to have each customer choose his or her loss limits before being able to play on-line.

• Safe financial transactions – Safeguards to prevent fraud, identity theft and money laundering.

• Tax collection – Mechanisms to ensure all appropriate taxes and fees are collected from the licensees and individuals.

• Location verification – Safeguards to ensure that the individual placing the bet or wager is physically located in a jurisdiction that permits that form of Internet gambling.

Applicants wanting to offer Internet gambling services in the U.S. would be required to obtain a federal license from the Secretary of the Treasury. Before an application for a license is approved, the applicant would be required to:

• Provide comprehensive financial statements and corporate structure documents
• Agree to be subject to all U.S. laws related to Internet gambling and related financial services transactions

Applicants convicted of a criminal violation involving gambling, money laundering, fraud or any other financial laws would not be eligible for an Internet gambling license.

• States and Indian tribes would be able to prohibit Internet gambling activities within their respective geographic borders. Restrictions could be enforced if individual states decide to opt out from permitting persons in their states from Internet gambling.

• Sports leagues – Any sports league could opt out of the regulatory framework and prohibit any Internet gambling on their games or events.

• Sports wagering – The proposed regulatory framework would prohibit any Internet gambling on sports games and events.

Of course the bill has a way to go before passage, but considering the financial situation of the Federal and State Governments, this maybe the perfect time for this type of bill to be passed.

If such a bill would pass in the US,  all prices paid for gambling domain names to date, will look like the bargain of the century.