24-May-2010

Wednesday, Rep. Barney Frank, D-Mass., said the House Financial Services Committee will hold a markup hearing for the Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267) in July. The hearing will be the final discussion on the bill before the committee must vote on whether to report it to the House of Representatives floor.

If enacted, the bill would legalize certain forms of Internet gambling in the U.S. by allowing the Treasury Department to license online gambling operators. Currently the Unlawful Internet Gambling Enforcement Act of 2006 outlaws all Internet gambling except fantasy sports wagers and pari-mutuel betting.

Frank’s announcement came during a House Ways and Means Committee hearing on HR 2267’s companion bill, the Internet Gambling Regulation and Tax Enforcement Act (HR 4976). Frank mentioned the markup hearing while rebutting an assertion from Rep. Robert Goodlatte, R-Va., that overwhelming support for the UIGEA made the HR 4976 hearing moot.

“That bill became law because the Senate fooled us,” Frank said. “I know that many of the members in the House voted for that bill assuming that, like many other bills, it would die in the Senate.

“Instead, because we had a Republican leader who was interested in running for president… (Sen. Bill Frist, R-Tenn.) got that bill added on to a bill in the Senate to which it was unrelated.”

Also testifying at the HR 4976 hearing were IRS Small Business and Self-Employed Division Commissioner Christopher Wagner and Financial Crimes Enforcement Network Deputy Director Charles Steele. Both men reported gaps in their ability to enforce tax and criminal law due to the UIGEA.

If enacted, the HR 4976 would provide a taxation framework for online gambling. According to the bill’s sponsor, Rep. James McDermott, D-Wash., the bill could generate $42 billion for the federal government and $30 billion for states over 10 years. The bill would allocate 5 percent of the generated revenue to a trust fund for adults raised in foster care.

Wednesday’s hearing did not conclude with a committee vote on whether to report HR4976 to the House floor. Nor has Frank announced an exact date for the markup hearing on HR 2267.

By: Phill Provance
phill.provance@acehoyle.com

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