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.

Bill Text
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 National Governors 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?”) 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


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