Guam, Hank Johnson and US online gambling laws

June 1 is the deadline for implementation of the Unlawful Internet Gambling Enforcement Act (“UIGEA”) in the US.

As the deadline approaches, Barney Frank, Chairman of the House Financial Services Committee is rushing to have a new law introduced that will repeal UIGEA and replace it with a regulated and taxed online gambling industry within the US.

Frank’s proposed bill was scheduled for consideration by the House last week but the hearing was deferred due to work overload but should get its time in the sun before 1 June.

If passed, it will mean that online gambling operators may obtain licenses to offer their product to US residents.  It will also mean that for the first time, US State and Federal governments will be getting a slice of the multi-billion dollar US online gambling market in the form of taxes (6% of deposits to the state and 2% to the federal government proposed) – a windfall estimated by the congressional Joint Committee on Taxation to be worth $42 billion to the federal government alone over then next 10 years.

Whether it will pass is anyone’s guess.  It’s a contentious issue with passionate support in both the for and against camps.  Libertarians want the right to entertain themselves as they see fit within the confines of their own homes.  Problem gambling organizations see it as a path to increased incidence of gambling addiction across America.  The influential American Gaming Association has now warmed to the idea of a regulated online gambling market but hasn’t directly supported Frank’s bill.

It is also a complicated issue.  Just as imposing an effective ban on online gambling is a very technically difficult thing to do, effective regulation is also complex.

But with politicians like Rep. Hank Johnson on the case, I’m sure the proposed legislation will be fully understood and get the due consideration it needs.