Internet Gambling Regulation and Enforcement Act of 2007

U.S. Representative Barney Frank (D-MA) introduced legislation on April 26, 2007
that would establish a regulatory and enforcement framework for licensed gambling
operators to accept bets and wagers from individuals in the U.S. The Internet Gambling
Regulation and Enforcement Act (H.R. 2046) would put in place practical and enforceable
standards to bring transparency to Internet gambling and provide consumers the
protections they expect and deserve. The bill protects against compulsive and underage
gambling, money laundering, fraud and identity theft. It does not differentiate between
different types of Internet gambling.

• BillText
• Bill Summary
• Frank's Press Release
• Frank Letter to Colleagues
• Congressional Co-Sponsors

Internet Gambling Regulation and Tax Enforcement Act of 2008

In March 2008, U.S. Representative Jim McDermott (D-WA) introduced the Internet
Gambling Regulation and Tax Enforcement Act of 2008 (H.R. 5523). This bill serves as a
companion to Representative Frank’s Internet Gambling Regulation and
Enforcement Act and would ensure that taxes are collected on regulated Internet
gambling activities.

The legislation strengthens provisions in an earlier version of the bill introduced
last year, and includes an enhanced reporting mechanism under which licensed gambling
operators are required to provide each customer an annual statement of winnings and
losses. It also establishes a two percent licensing fee that is paid by the operator,
not the individual gambler. The licensing fee is designed to equalize the costs of
operation in providing gambling services online, as opposed to brick-and-mortar casinos
providing gambling services in-person, and would only be applied to online
operators.

Collectively, the Frank and McDermott bills would remove an unnecessary government
prohibition and protect an individual’s freedom to use the Internet,
including gambling online, as they choose. Current efforts to prohibit Internet
gambling are futile. Millions of Americans are gambling online without proper
protections.

As Congress works to find funding for important government programs, the legislation
is expected to generate between $8.7 billion and $42.8 billion in revenues for the U.S.
Treasury in the first ten years of enactment, according to analysis prepared by
PriceWaterhouseCoopers. While significant amounts, industry experts believe that these
figures are conservative.

• Bill Text
• Floor Statement
• Frequently Asked Questions
• McDermott Letter to Colleagues
• PriceWaterhouseCoopers Tax Analysis
• Additional Information on H.R. 5523

Investing in our Human Resources Act of 2008

In a prime example of how additional government revenue could be applied in a
“Pay For†environment, U.S. Representative Jim McDermott
(D-WA) introduced legislation on July 15, 2008 that would provide job training and
educational assistance for those in declining sectors of the economy and foster care.
Funding for the bill, Investing in our Human Resources Act of 2008 (H.R. 6501), would
come from new revenue generated by regulated Internet gambling activities.

The legislation would invest approximately $40 billion over 10 years in the
struggling American economy and its most disadvantaged workers without increasing the
deficit. The revenues collected from Internet gambling activity would be allocated
annually to each state based on population size. A provision in the legislation also
dedicates a portion of the resources to encourage responsible Internet gambling
behavior and an awareness of unsafe practices, something which has been praised by
problem gambling advocates.

U.S. Representatives George Miller (D-CA) and John B. Larson (D-CT) are original
co-sponsors of the legislation, demonstrating the growing support for Internet gambling
regulation by key members of the Democratic Congressional leadership.

• Bill Text
• McDermott Letter to Colleagues
• Breakdown of Revenue by State
• McDermott Letter to National Conference of State Legislatures and NationalGovernors Association
• Additional Information

Payments System Protection Act of 2008

U.S. Representatives Barney Frank (D-MA) introduced legislation, H.R. 6870, on
September 11, 2008 that would have the practical impact of delaying implementation of
regulations to implement the Unlawful Internet Gambling Enforcement Act of 2006
(UIGEA). Additionally, it would relieve the burden for banks and other payments
services to determine for themselves what types of online activity are lawful and what
are not. The legislation, as amended, was approved by a 30-19 vote in the House
Committee on Financial Services on September 16, 2008.

Specifically, H.R. 6870 directs the Department of the Treasury and Federal Reserve
System, in consultation with the Attorney General, to appoint a special Administrative
Law Judge to define the types of unlawful online gambling and conduct an economic
impact study on the costs for compliance. An amendment to H.R. 6870, introduced by Rep.
Frank to appease the sports leagues, requires federal regulators to issue regulations
to financial institutions within 60 days of enactment to block all Internet gambling
wagers on sports, except for those involving horse racing, dog racing and jai-lai. The
U.S. Treasury would also be required to specify a list of unlawful online sports
operators.

Concerns about the proposed rules to implement UIGEA were previously raised at a
congressional hearing on April 2, 2008 (“Proposed UIGEA Regulations:
Burden without Benefit?â€) and in hundreds of comments submitted to the
Department of the Treasury and Federal Reserve System. At the hearing, representatives
of the Department of the Treasury and Federal Reserve System acknowledged the
challenges U.S. financial institutions will face in attempting to comply with
UIGEA.

• Bill Text
• Financial Services Committee Members' Letter to Treasury Department and Federal Reserve
• Key Congressional Committee Votes to Clarify Internet Gambling Ban
• Vote Count From Financial Services Committee Mark Up on September 16,2008