Internet Gambling Bill: Hold or Fold?

On July 21, 2010, Committee Hearings were held regarding H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. A bill markup was scheduled for July 27, 2010 in the House Financial Services Committee. The Act would establish an Internet Licensing Program to facilitate the legalization and regulation of Internet gambling. One-eyed jack, Congressman Barney Frank of Massachusetts, first introduced the legislation in May, 2010, and the bill currently has sixty-nine co-sponsors.

Two other bills were dealt alongside H.R. 2267. First, H.R. 2268, sponsored by Congressman Jim McDermott of Washington, would impose an Internet gambling license fee, withhold taxes on Internet gambling winnings, and require operators to disclose themselves and those placing bets with them. Second, H.R. 4976, also sponsored by McDermott, adds a requirement that site operators pay state governments a six percent gambling tax.

Proponents of the bill point out the economic benefits that would result from taxing Internet gambling. One frequently cited study reports that legalizing Internet gambling would result in almost fifty-eight billion dollars of domestic taxes by 2015.

However, unless Barney Frank has pocket aces, this is a hand he might not win. Although arguably, because it was attached to the Safe Port Act, the Unlawful Internet Gambling Enforcement Act, prohibiting Internet gambling, passed both the House and Senate by extremely high margins only four years ago. Furthermore, tribal groups and conservative family and religious groups oppose the legislation. One article stated that sixty-seven percent of Americans disapprove of decriminalizing Internet gambling.

Maintaining his poker face, Barney Frank has continued to promote the bill saying, “We are prepared to make some of the changes that people have talked about.” Only time will tell how this high-stakes game will play out.

— Jenn Weizenecker

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