Frank Barney officially introduces US gambling legislation

Representative Barney Frank, the Democratic chairman of the House Financial Services Committee, has come through as he claimed he would, and introduced legislation that would allow online gambling in the U.S., loosening a ban enacted last year.

At a press conference in Washington yesterday, Frank said “The measure would allow Americans to bet online with licensed Internet operators that have safeguards against underage and compulsive gambling and agree to be subject to U.S. jurisdiction and taxes”.

“The issue here is whether adults who work for their money, in the comfort of their homes, should be allowed to engage in a form of recreation which they enjoy and which has no conceivable negative impact on anybody else,” he added.

Some Republicans said they would vigorously oppose Frank’s legislation, and lawmakers predicted a political uproar over it.

“There are high levels of passion by people on both sides,” said Representative Ray LaHood, an Illinois Republican. “The people who are opposed feel very strongly.”

The proposed legislation would let the U.S. Treasury Department set protections against money laundering and fraud. It bars betting on college and professional sports whose governing bodies such as the National Collegiate Athletic Association and National Football League don’t sanction gambling.

The Republican-controlled Congress passed legislation on 30th September, that curbs financial payments from banks to offshore Internet casinos that are illegal under U.S. law. Sponsored by Representative Jim Leach, an Iowa Republican who lost a re- election bid in November, the law is aimed at shutting down the payment system for Internet gambling.

“I don’t see the Congress going in the opposite direction anytime soon.” said Representative Bob Goodlatte, a Virginia Republican and co-sponsor of last year’s ban. “I am very strongly opposed.”

Internet-based casinos such as PartyGaming Plc and 888 Holdings Plc, operating in locations such as Gibraltar and Antigua, took in billions from U.S. gamblers.

U.S. Internet gambling generated $5.9 billion in 2005 while U.S. commercial casinos took in about $32 billion that year, according to the American Gaming Association.

Analysts said the legislation to create exemptions for license holders, may favor U.S. gambling companies. “Wouldn’t you expect licensing in the U.S. to benefit U.S. companies and U.S. shareholders?” said Ivor Jones, an analyst at Panmure Gordon & Co. in London.

Shares of PartyGaming dropped 7.5 pence, or 13 percent, to 51 pence in London, the steepest slide since Oct. 16, which was the first trading day after the company ceased U.S. operations. After slumping 76 percent in 2006, the stock had almost doubled this year before Frank’s remarks today. Whilst shares of London-based Sportingbet Plc and Gibraltar-based 888 Holdings Plc also fell in London trading.

Frank introduced the bill with Representative Peter King, a New York Republican, and 10 other co-sponsors. Frank and King said they expect many other members will come forward to support the legislation. “This is a kind of libertarian, let-people-have-fun kind of thing.” Frank said. “The ban has ‘activated’ online poker players and others who are lobbying now for a reversal.”

The government of Antigua, which is home to 32 registered online gambling operations, praised Frank’s initiative in a written statement.

“While we have not yet seen the legislation,” said Errol Cort, Antigua’s minister of finance and the economy“, we are encouraged that such a prominent legislator in the United States has stepped forward in support of a rational approach to the provision of remote gaming services”.

Poker Players Alliance Chairman Alfonse D’Amato, a former Republican senator from New York, called Frank’s proposal “A common sense approach to Internet gambling”.

“The Internet poker genie is out of the bottle, you cannot put it back. The United Kingdom successfully regulates gambling, and with this bill we can too. ” D’Amato said.

Meanwhile, a spokesman for Representative Shelley Berkley, a Nevada Democrat, said she plans to introduce a measure next week calling for a one-year federal study of online gambling.

Directors of the American Gaming Association, whose members include Harrah’s and MGM Mirage, are meeting today in Las Vegas to discuss Frank’s proposal, claimed spokeswoman Holly Thomsen from Washington.