The legislation would allow the Treasury Department to license and regulate online gambling companies that serve American customers, according to the New York Times. Under the current law, approved by Congress in September 2006, financial institutions are banned from handling transactions made to and from Internet gambling sites.
Frank, who is chairman of the House Financial Services Committee, gave two reasons for the legislation. First, the federal government could collect increased tax revenues if Internet gambling was regulated. Second, he said online gambling should be legal as a matter of personal liberty, calling it an activity the government should neither encourage nor prohibit.
Unlike the 2007 bill Frank introduced, this bill forbids betting on sports events, while the earlier one let sports organizations decide themselves whether to prohibit online betting on their games.
Both bills allow states and Indian tribal lands to opt out if they do not want their residents using licensed Web sites, and require companies seeking a license to employ safeguards to help prevent minors from gaining access to gambling sites and combat compulsive gambling. However, Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee, said he was skeptical about age verification technology and other safeguards, citing 2007 testimony from an Internet security expert before his committee asserting that such “security measures are inherently unreliable, can be trivially circumvented and will fail at high rates," the New York Times reported.
Senate majority leader, Harry Reid, D-Nevada, may also have issues with the bill, though it is not clear how much of that is from his Las Vegas constituents.