For many people the US stance against online gambling makes little sense and in April last year Rep Barney Frank and forty-five co-sponsors introduced bill H.R.2046 Internet Gambling Regulation and Enforcement Act of 2007. The initiative is for the licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network (FCEN) and for other purposes. Less than two months later bill H.R.2607 Internet Gambling Regulation and Tax Enforcement Act of 2007 was introduced by Rep James McDermott and co-sponsor Neil Abercrombie.

This bill would amend the Internal Revenue Code to establish licensing requirements and fees for Internet gambling operators, and require them to pay the Director of the FCEN during each 30-day period of operation 2% of all bets placed. It would require the Director to grant Internet gambling licences to applicants who meet the criteria set. The legislation would reinforce the rights of States to control what, if any, level of Internet gambling was permissible within their borders, including the ability to apply additional taxes, and to ensure that appropriate consumer protections and limitations were in place.

This month on 4 March Congressman McDermott introduced H.R.5523 ‘To amend the Internal Revenue Code of 1986 to regulate and tax Internet gambling' which strengthens provisions in the earlier version of the bill. It includes an enhanced reporting mechanism under which licensed gambling operators are required to provide each customer an annual statement of winnings and losses. At the end of February Congressman George Miller, the influential chairman of the House Democratic Policy Committee and the House Education and Labor Committee, signed on as another co-sponsor of Barney Frank’s bill.

A further bill (H.R.2140) was introduced on 3 May 2007 with the official title 'To provide for a study by the National Academy of Sciences to identify the proper response of the United States to the growth of Internet gambling.’ So far this bill, as with the others, has little support from Republicans in the House. Should the federal government ever do a U-turn on online gambling policy, the estimated tax benefits could reach as much as US$40 billion in the following decade.

Americans still gamble online but there is a lot to be done before the majority of legislators are convinced that consumer protection by regulation and taxation is a better bet than citizens playing illegally on unrestricted sites. Recently it was revealed that the American Gaming Association, which represents land-based casino operators, spent US$1.7 million in 2007 on lobbying the government to support the Internet gambling study, whilst the National Basketball Association spent US$330,000 lobbying to support the US ban. (E-03.06.08)

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