The House Financial Services Committee is considering bills that would pave the way for legalized online gambling in the United States.
The chief bill under consideration at a December committee hearing was the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267), written by Rep. Barney Frank (D-MA), a longtime opponent of Internet gambling bans.
The bill—which Frank announced would be considered this year—would create a federal framework for the licensing and regulation of Internet gambling, effectively legalizing it.
“I continue to believe it is a great mistake for the Congress of the United States to tell adults what to do with their own money on a voluntary basis,” Frank said during the hearing. “It is not the business of the federal government to prevent them legally from doing it.”
Hearing testimony focused on how H.R. 2267 could help bolster the safety of online gambling and online gamblers in the United States.
“If the United States decides to legalize and regulate online gambling sites, we would expect that most U.S. resident gamblers would be diverted eventually from overseas sites to reputable and trusted domestic operators,” said Prof. Malcolm K. Sparrow of the John F. Kennedy School of Government at Harvard University in his Committee testimony. “In the long run, reputable gambling operations under American control should come to dominate online gambling opportunities selected by U.S. residents. And if that happens, all categories of risk would be better controlled than they are at present, and I believe that U.S. consumers would be better protected.”
Samuel A. Vallandingham, testifying for the Independent Community Bankers of America, described regulatory uncertainty created by previous Internet gambling laws H.R. 2267 would supplant. These laws include the Unlawful Internet Gambling Enforcement Act of 2006, known as UIGEA, which prohibits U.S. banks and other financial institutions from moving funds associated with “unlawful Internet gambling.”
Vallandingham said, “the law fails to define ‘unlawful Internet gambling,’ which is vitally necessary if banks are to comply with the law. Obviously, this is not workable.”
Just days before December 1, 2009, when the UIGEA prohibitions were to go into effect, the Department of the Treasury and the Federal Reserved delayed the start date. These prohibitions are now scheduled to go into effect June 1.
“This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law,” said Rep. Frank in response to the delay.
“We remain baffled by the right wing’s insistence that the personal freedoms of American adults to what they want with their own money be curtailed,” said Steven W. Adamske, Communications Director or the House Committee on Financial Services “We hope to be able to give Americans the freedom online that they have in many other parts of the country very soon.”
Arin Greenwood ([email protected]) is a writer and lawyer in Alexandria, Virginia.