Coming Soon to an On-line Casino Near You?

Efforts to legalize Internet gambling are ramping up. Some in the credit card industry and other advocates claim that legalization would add up to billions of dollars in tax and licensing revenue for the federal government. Horse racing organizations also advocated for changes after some credit card companies refused to process online pari-mutuel wagers, which were supposed to be excused from the new restrictions.

The Unlawful Internet Gambling Enforcement Act of 2006 prohibits U.S. banks from accepting payments from credit cards, checks, or wire transfers to settle online bets. The act was supposed to take effect on Dec. 1, 2009, but a delay was urged by gambling interests, banks, and other financial institutions that argued that the law was opaque and non-enforceable. A bill supported by Rep. Jim McDermott (D-Wash.) would levy a 2 percent tax on gambling deposits, which backers say could bring in $42 billion in tax revenue over a decade. A more controversial proposed bill by Rep. Frank (D-Mass.) maintains the illegality of online sports betting as it sets up federal oversight of online gambling firms in return for five-year licenses, and would include protections aimed at deterring underage players, compulsive gamblers, and criminal activity.