House Financial Services Committee Passes Barney Frank's Online Gambling Bill

The House Financial Services Committee approved this week a project that would legalize some Internet gambling, allowing players based in the U.S to place online wagers with companies licensed by the Treasury Department.

Members of the House Financial Services Committee voted 41-22 to approve the legislation, meaning that the bill could be brought to the floor by House Democratic leadership. The bill introduced by Representative Barney Frank, chairman of the House Financial Services Committee, is aimed at legalizing some forms of internet gaming, including online poker, however, other forms of gambling such as sportsbetting still wouldn't be allowed under the bill.

The bill would roll back the UIGEA law approved in 2006,and effective since June, 2010. The law bars banks from processing payments to “illegal” gambling websites, however, critics of the 2006 law say it makes no distinction between legal and illegal online betting. The bill also has a strong opposition from the financial sector, which claims that such regulations require banks and credit-card companies to determine what can be consider illegal.

The committee approved a series of amendments to ensure sportsbetting isn’t allowed under the new bill. The panel also approved amendments to prevent players from accessing gaming sites in states that prohibit it, prevent underage and compulsive gambling, prohibit advertising targeting young populations and ban the use of credit cards for gambling purposes. Instead, players would be able to fund their accounts using only debit cards or prepaid accounts.

Frank's bill would require firms and companies offering online gambling services to U.S players would have to base much of their operations in the U.S. Firms that have continued to illegally offer their services in U.S. since the UIGEA went into full effect, would not qualify for a license.