The congressman has, for better or worse, regularly been identified as an agent of financial reform and was co-author of the Dodd-Frank Act, a bill that sought to provide greater consumer protection as well implement financial regulations in order to any prevent future economic turmoil.

In addition from Frank’s legacy to reform financial practices in the United States, he will also be remembered as one of the first and most visible gay figures to have been involved in congressional politics.

Across the Twitterscape, first reactions ranged from adulation and lament:

to irreverence and outright relief:

One amusing piece of trivia that’s been making the retweeting rounds on Twitter is the singular post from an account alleged to belong to Rep. Frank (the account is not verified, so its verity is debatable):

Should that first and final tweet ever be validated, our congressional model of Oscar Wilde has taken his final bow from the absurd theater of politics.

The Internet Gambling Regulation and Consumer Protection and Enforcement Act (H.R. 2267), legislation introduced by Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, passed by a 41-22 vote.

Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative, told WebProNews "This historic vote clears the way for Chairman Frank’s online gambling regulatory bill to move forward."

"With Congress bitterly divided and only a handful of bi-partisan bills coming out of the Financial Services Committee, we’re pleased Committee members from both sides of the aisle were able to come together to advance this important legislation," said Waxman.

Rep. John Campbell (R-CA) offered, and the Committee approved, an amendment that would further strengthen the legislation’s already strict consumer protections, including a requirement for licensed operators to have each customer choose his or her loss limits before being able to play on-line.  Rep. Campbell’s amendment also requires licensees to protect customers by ensuring the customer privacy and security and protecting against fraud and money laundering.

The legislation reinforces the rights of each state to determine whether or not to allow Internet gambling activity for people accessing the Internet within the state and to apply other restrictions on the activity as determined necessary.

According to a Joint Committee on Taxation tax revenue analysis, regulated Internet gambling is expected to generate as much as $42 billion in federal government revenue over its first 10 years.  Additionally, a recent analysis by H2 Gambling Capital predicts that Internet gambling regulation would create as many as 32,000 jobs over its first five years.

"The momentum of today’s vote and growing bi-partisan support for online gambling regulation demonstrates to congressional leaders in the House and Senate that this issue is a priority and should be addressed," said Waxman. 

"Leaving in place a failed prohibition should no longer be the government’s misguided policy approach, leaving millions of Americans vulnerable as they continue to find a way to gamble online in a thriving underground marketplace."

The legislation has the support of 69 bi-partisan co-sponsors. Support for the legislation was also announced last week by the U.S. Chamber of Commerce, the Financial Services Roundtable and the National Association of Federal Credit Unions.

The hearing will begin at 10 am EST and will include testimony from leaders in the fields of online security and consumer safety. Experts will describe how current systems and technologies have been successful in blocking minors from gambling online, reducing compulsive gambling and protecting consumers against money laundering, fraud and identity theft.

"This hearing will provide further evidence on the ability to effectively regulate Internet gambling and require licensed operators to utilize already-proven technologies to protect consumers," said Michael Waxman, spokesperson of the Safe and Secure Internet Gambling Initiative. 

"It’s expected this hearing will answer any outstanding questions and pave the way for a vote in the committee on Chairman Frank’s legislation."

The hearing follows the recent announcement by the Federal Reserve and Department of the Treasury to extend the Unlawful Internet Gambling Enforcement Act (UIGEA) by six months to June 1,2010.

The delay, Chairman Frank said " will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law."

"Coupled with last week’s decision by the Treasury Department and Federal Reserve to delay UIGEA implementation, this hearing further builds the case for Congress to rewrite U.S. gambling laws," said Waxman. 

"It’s simply common sense to override UIGEA, a poorly conceived law that is doomed to fail, and replace it with a framework that regulates a thriving underground marketplace to protect consumers and collect billions in otherwise lost revenue."

The Internet Gambling Regulation, Consumer Protection and Enforcement ACT would establish a framework to allow licensed gambling operators to accept wagers from people in the U.S. In addition to consumer protections, the legislation would give each state the right to decide if they wanted to allow online gambling within their borders.

The Joint Committee on Taxation estimates that up to $42 billion would be generated over 10 years with the legalization of online gambling.
 

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The Internet Gambling Regulation, Consumer Protection, and Enforcement Act would create a federal regulatory and enforcement framework allowing Internet gambling operators to obtain licenses to accept wages from people in the United States.

Alfonse D’Amato

The legislation is in response to the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA), which restricted the use of the payments system for Americans who gamble online.

Frank’s bill received criticism from a senior Republican lawmaker opposed to gambling. "Illegal off-shore Internet gambling sites are a criminal enterprise," said Representative Spencer Bachus, the top Republican on the financial services committee. "Allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," said Bachus from Alabama.

The Poker Players Alliance, a poker grassroots advocacy group applauded the proposed legislation.

"Online poker is a legal, thriving industry and poker players deserve the consumer protections and the freedom to play that are provided for in this legislation," PPA Chairman and former Senator Alfonse D’Amato said.

"We are grateful for Chairman Frank’s leadership and will be activating our grassroots army made up of over one million members to help him drive legislation."

Online gambling could generate $52 billion in revenue in the U.S. over the next ten years if the three-year-old ban on Internet gambling was lifted and the government taxed the industry, according to a recent study from PricewaterhouseCoopers.

Barney Frank

A bill to legalize online gambling in the U.S. had been planned to be introduced earlier, but Frank said his committee had been working on other issues focused on the credit crisis and financial regulation reform. Frank said the bill is being drafted this week.

"We’ll be introducing it next week and I plan to move on it," said Frank, a Democrat, speaking at the Reuters Global Financial Regulation Summit in Washington.

Last month the European Commission said that U.S. laws restricting online gambling violate World Trade Organization (WTO) rules. The commission said WTO proceedings against the U.S. would be justified but the EU would first try and find a negotiated solution on the issue.

"It is for the US to decide how best to regulate Internet gambling in its market, but this must be done in a way that fully respects WTO obligations," said Catherine Ashton, EU Trade Commissioner.
 

The study by accounting firm PricewaterhouseCoopers could influence Congress to lift the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA).

"There is a dramatic need to have a regulated system that protects American consumers. Right now, it’s the Wild West," Jeffrey Sandman, a spokesman for the Safe and Secure Internet Gambling Initiative, told Reuters on Wednesday.

Barney Frank

European online gambling companies have lost billions after Congress passed the law in 2006 and they left the U.S. market. The European Union has put pressure on the U.S. to abandon the UIGEA. The EU says the U.S. has violated trade laws and has given it a grace period to resolve the matter before taking the issue to the World Trade Organization.

PricewaterhouseCoopers’ latest study of how much the U.S. could generate in revenue by taxing and regulating online gambling has increased by 22 percent over 2007 estimates, as Americans continue to gamble online even with the ban in place.

House of Representatives Financial Services Committee Chairman Barney Frank plans to reintroduce a bill next month to do away with the 2006 ban. Backers hope the need for revenue after the massive bailout and stimulus packages will increase the chances of the ban being lifted.
 

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.
 

House Financial Services Committee Chairman Barney Frank (D-MA) wrote to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernake asking them to delay implanting regulations concerning the Unlawful Internet Gambling Enforcement Act (UIGEA).

"I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations implementing the Unlawful Internet Gambling Enforcement Act," Frank wrote.

"This midnight rulemaking will tie the hands of the new Administration, burden the financial services industry at a time of economic crisis, and contradict the stated intent of the Financial Services Committee"

It is expected that the regulations, issued to implement the UIGEA of 2006 will be finalized before the next administration is able to review them.

A flaw in the proposed regulations to enforce UIGEA is that they leave banks to interpret state and Federal gambling laws, which do not make clear the difference between legal and illegal Internet gambling activities.

Representatives of the Department of the Treasury and Federal Reserve acknowledged the challenges banks will face in trying to comply with UIGEA in testimony before Congress in April. Most payment systems are not designed to comply with this law, "it will be very difficult to shut off payment systems for use of Internet gambling transactions," said Louise Roseman, Director, Division of Federal Reserve Bank Operations and Payment Systems.

"The UIGEA and the Proposed Rule do not provide a rational path towards halting unlawful Internet gambling," said Wayne Abernathy, American Bankers Association’s executive vice president of financial institutions policy and regulatory affairs.

Online gambling advocates have also been critical of UIGEA. "The reality is that UIGEA is unclear, burdensome and doomed to fail," said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative."It simply does not make sense to impose more costs and burdens on financial companies, while the activity they are expected to stop flourishes in an unregulated, uncontrolled and underground marketplace.

"Congress should look to regulate Internet gambling in order to protect consumers and collect billions of dollars that are being lost to offshore Internet gambling operators."