Internet Gambling Bill Set For Markup Tuesday
Legislation decriminalizing online gambling will be marked up Tuesday by the House Financial Services Committee, announced committee Chairman Barney Frank, D-Mass. But the ranking member Rep. Spencer Bachus, R-Miss., said he would “do everything in my power to stop it.” Frank introduced HR-2267 in May 2009 to overturn the Unlawful Internet Gambling Enforcement Act, which bans the use of certain payment systems for online wagers (WID July 23 p7). The bill would establish a federal regulatory framework to license online gambling operations and give states a way to opt out and block Internet gambling within their jurisdictions. A companion bill by Rep. Jim McDermott, D-Wash., would tax Internet gambling. Frank’s staff didn’t return calls for comment.
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The top Republican on the committee promised a stiff fight. Online gambling is the ultimate example of unwise financial choices, Bachus said before a hearing Thursday on the bill. The bill would allow anyone including children to gamble 24 hours a day and would lead to crime, addiction and financial distress, he said. “Considering that the social and economic harm done to America’s families and to young people from unlawful Internet gambling is well-documented, I ask: is addicting the Federal government to Internet gambling taxes really worth it?”
Frank’s bill would lift the burden of UIGEA enforcement from banks, said Cary Whaley, vice president of payments and technology policy at the Independent Community Bankers of America. While the federal regulations guiding banks on enforcing UIGEA haven’t been as burdensome as anticipated, it’s an awkward task that bankers don’t want, he said. “That is not the business of community banks,” he said.
It’s a foregone conclusion that the committee will mark up the bill, but it’s unclear whether the measure will pass the House this session, said John Pappas, executive director of the Poker Player’s Alliance. A vote would be Congress’s first on licensing poker and Internet gambling, he said. “The former misguided attempts to prohibit it have failed, and now it’s time for Congress to regulate an activity that is not going away."
McDermott’s bill, HR-2268, would move forward if Frank’s legislation is marked up, said a spokesman for McDermott. The House Ways and Means Committee, which McDermott is on, has jurisdiction over the bill because it involves taxation. It’s unclear when the bill will be marked up, but it likely will be after Congress returns from its August recess, the spokesman said. Legalizing Internet gambling would raise as much as $42 billion in federal tax revenue over 10 years and $25 billion to $30 billion for states, he said.