One of the midnight actions of the Bush administration and the Republican Congress in 2006 was the passage of the Unlawful Internet Gambling Enforcement Act (UIEGA) which attempted to shut down online gaming in the United States by not only outlawing the gaming itself but attempting to criminalize any support activities, including payment processing or related activities. While it has had its moments, the rise in online gaming has only been slowed, not stopped.
Now that Congress has passed the stimulus package and has received the President's budget with its enormous prospective deficits, it is very likely that Congress will soon turn its attention to the repeal of UIEGA. House Financial Services Committee Chairman Barney Frank is readying a bill which he intends to introduce within a month to repeal UIEGA and establish a regulatory framework within which online gaming could legally operate and be regulated by the federal government. Chairman Frank believes that the timing is right to unlock the restarints that are "impinging" on American' freedoms. He believes that public opinion is demanding the right to gamble online.
Strengthening the case for passage of UIEGA's repeal is a recent study conducted by the international accounting firm PricewaterhouseCoopers, which estimated that the United States could likely receive up to $52 billion in tax revenue over a ten year period by legalizing and regulating online gaming. Given the current state of the federal government's finances, that extra revenue may be hard to pass up.
The US is also be facing the threat of a trade challenge from the European Union. The Remote Gambling Association accuses the U.S. Justice Department of singling out European online gambling companies like PartyGaming and 888.com for prosecution while allowing U.S. companies to operate freely. The European Commission, acting on a RGA petition, began a formal investigation into that issue last year and is expected to release a report next month saying it has grounds to take action at the World Trade Organization.
Longtime blog readers may recall that the US has already lost one case at the WTO regarding online gaming brought by Antigua and I don't really think the Obama administration will relish having to take another one there. I suspect that the administration will look favorably on Chairman Frank's efforts, despite the likely opposition of the professional sports leagues, the NCAA and the conservative family values crowd. If you enjoy online gaming or poker, be sure and let your Congressman and Senator know. You can be sure that they will hear from the other side.