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A bill that would repeal the U.S. ban on online gambling is set to be introduced next week by U.S. Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee.

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.