“Americans ought to be free to do what they want with their own money” – Rep. Barney Frank (D-Mass)

Congressman Frank summarizes the feelings of many Americans with his support of Internet gambling in the United States. He has been a staunch supporter of officially legalizing, regulating, and taxing Internet gambling, and he has recently received support from many very big power names in the worlds of gambling and politics. Over the next several posts, we are going to provide an update on the state of Internet gambling in the U.S., what attempts are being made in Congress to regulate and tax Internet gambling, what these efforts might mean to online poker, and what you can do to help out the cause.

First, many players in the U.S. continue to play online poker. Several sites, including FullTiltPoker and PokerStars, continue to allow deposits from U.S. players. Many players report that it is simple to deposit and cash out in the U.S. and the risk seems minimal, except in the state of Washington where Internet gambling is a felony. In fact, with the enforcement of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) pushed back by Congress until June 1, there really is not much teeth to any prohibitions of online poker in the U.S.

However, many players who would otherwise participate stay away, and competition among online poker sites is certainly minimized as a result of fear arising from the UIGEA.

Recent developments in Congress give U.S. poker players a reason to have some hope. On February 22, 2010, Senators Ron Wyden (D-OR) and Judd Gregg (R-NH) introduced S 3018, the Bipartisan Tax Fairness and Simplification Act. The bill establishes a framework to tax and regulate internet gambling in the United States, along with many other topics. The clause related to Internet gambling is what some call a "pay-for" clause, a tax increase to help cover the tax decreases in the other portions of the act. The act contains a 2% tax on gambling deposits and sponsors estimate it would generate $42 Billion of revenue for the U.S. government. On the serious down side, that’s one heck of a rake that U.S. poker players would have to overcome. Although it is directed at the gambling sites, it is easy to see how this could be passed on to the player.

Although this specific piece of legislation is unlikely to pass, it represents an effort in the Senate to match Representative Frank’s efforts in the House. Congressman Frank’s HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, which has 66 co-sponsors on both sides of the aisle, was discussed in the House Financial Services Committee in December. Congressman Frank thinks he can move this bill forward before the UIGEA reaches the enforcement date of June 1.

There is certainly plenty of uncertainty about where this all will lead. It is an election year and many Senators and Congressmen will be more focused on preserving their jobs and dealing with the economy than worrying about online poker. In the meantime, if you feel strongly about online poker in the U.S., join up with the Poker Player’s Alliance (pokerplayersalliance.org) and make sure your voice is heard.

In our next two posts, we will discuss what some of the major players in offline gambling in the U.S. are doing to get prepared for a potential new wave of online poker, and we’ll also discuss more about why some people are against online poker.