Frank To Introduce Repeal Of Online Gambling Ban

Though Representative Barney Frank has gotten most of his attention due to his role in handling the economic crisis, the chairman of the House Financial Services Committee is also known for his nearly lone opposition to the Unlawful Internet Gambling Enforcement Act, almost unanimously passed in late 2006. Frank is holding steady on that opposition and, according to Reuters, will introduce legislation next month to repeal that law.

Barney Frank

In addition to concerns that the law, which President Bush signed into law in October 2006, violates Americans’ civil liberties, Frank argues the law puts undue burden on financial institutions tasked with helping police Internet transactions.

On top of that, European Union regulators have threatened to file a complaint against the US government with the World Trade Organization, which condemned the law from the outset as violation of international trade agreements and civil liberties. Despite that opposition, and despite the legality of such business in other countries, the Bush Administration Department of Justice was vigilant about arresting foreign executives of online gambling companies once they stepped foot on American soil.

One such target, Anurag Dikshit, the founder of PartyGaming whose unfortunate name suggests he’s suffered enough, pleaded guilty to Internet gambling charges late last year and was fined a hefty $300 million.

Jon Kyl

The UIGEA was pushed through in a late-night “must pass” session in 2006 by Republican Senator Jon Kyl, who called online gambling “the crack cocaine of gambling,” The intention of the bill was masked by its official title, the SAFE Port Act.

Late night tactics and renaming schemes didn’t escape the attention of the press and critics, though, who noted the inherent hypocrisy of outlawing certain types of gambling while preserving state sponsored or approved forms of gambling like state lottery and horse racing.

The new illegality of online gambling climaxed with Kentucky Governor Steve Beshear calling for the forfeiture of international gambling domains to the state, which may not survive the legal challenges railed against it. This particular issue shed more light on problems with the legislation, especially regarding the right of a state to take action against foreign based companies.

Though the law is regarded as a Republican fetish held over from a Congress that has changed much over two election cycles, the UIGEA wasn’t one of those quintessential Democrat vs. Republican issues. The parties were united on this one, gaining near unanimous passage in both houses in 2006, and powerful Democrats in favor of it then are still in office today: Pelosi, Biden, Obama all voted yes.

With that in mind, it will be interesting to see how successful Frank’s motion to repeal will be. Repealing the law would, in effect, be an exercise in self-contradiction, and the politicians involved, save for Barney Frank, would be admitting they were wrong on the gambling issue. In that light, the future looks bleak for repeal—but we’ll see how honest they really are.