Online gambling before Ways and Means on Wednesday

The House Ways and Means Committee will explore possible Internet gambling taxes at a hearing Wednesday, less than a month before a federal ban on online gambling payments enters effect.

The committee's inquiry will focus specifically on tax and revenue portions of bills introduced over the past year that would revise or totally roll back the Unlawful Internet Gambling Enforcement Act (UIGEA). That law, which cleared Congress in 2006, was slated to enter effect in December 2009, but lawmakers successfully lobbied for a six-month delay.


The ban on banks from processing online gambling payments is now set to begin June 1.

A previous attempt to explore UIGEA and its alternatives before the House Financial Services Committee was canceled in April because of a scheduling conflict. At the time, Chairman Barney Frank (D-Mass.) promised to reschedule the hearing as soon as possible.

Unlike the Ways and Means hearing, which will focus on possible revenue sources, Frank's inquiry would have focused on two bills he authored as alternatives to UIGEA.

The first, titled the "Reasonable Prudence in Regulation Act," would delay that fast-approaching June 1 deadline for another year. The suspension would then give lawmakers time to debate alternatives to UIGEA, which Frank first targeted for repeal in May 2009.

A second bill, the "Internet Gambling Regulation, Consumer Protection and Enforcement Act," would overturn UIGEA entirely and permit domestic gambling, provided that companies adhere to strict licensing rules. The legislation is an attempt to rein in an industry that has responded to federal restrictions by relocating overseas, the congressman has previously emphasized.