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USA Legislative efforts to authorise and licence internet gambling Despite previous efforts to prohibit regulation and licensure of on 3 December 2009 3 . The House intrastate internet poker. Committee on Ways and Means is internet gambling, the US has is scheduled to hold a hearing on reviewed its position as the The Congressional Bills ‘tax proposals related to legislation Congress - and several States - are Three Bills are currently pending to legalize internet gambling' on 19 in the process of enacting Bills to in the US Congress that, if enacted, May 2010 ’ . would provide a licensure and This section addresses two things. regulate internet wagering. Linda J. regulatory scheme for certain types First, we consider similarities and Shorey, Anthony R. Holtzman and of internet wagering. differences in how the Frank and Robert A. Lawton, of K&L Gates, Representative Barney Frank (D- Menendez Bills would deal with examine the latest legislative MA) introduced on 6 May 2009 the licensure and regulation of developments in the USA. H.R. 2267, the Internet Gambling internet wagering. Senator Wyden's Regulation, Consumer Protection, Bill - S. 3018 - is not discussed From the 104th (1995-1996) and Enforcement Act (‘the Frank because its regulatory and licensure through to the 109th Congress Bill’). Senator Robert Menendez scheme is similar to that in Rep. (2005-2006), Bills were introduced (D-NJ) introduced on 6 August Frank's Bill. Second, we consider in the House of Representatives 2009 S. 1597, the Internet Poker the tax schemes of Senator (‘the House’) or the Senate for the and Games of Skill Regulation, Wyden's Bill (S. 3018), Senator purpose of specifically prohibiting Consumer Protection, and Menendez' Bill (S. 1597), and Rep. betting or wagering using the Enforcement Act of 2009 (‘the McDermott's second Bill (H.R. internet. The culmination of those Menendez Bill’). Senators Ron 4976). efforts in 2006 was the enactment Wyden (D-OR) and Judd Gregg The Frank and Menendez Bills of the Unlawful Internet Gambling (R-NH) introduced on 23 Enforcement Act (UIGEA) 1 . The February 2010 S. 3018, the As noted above, those Bills would 110th Congress (2007-2008) saw Bipartisan Tax Fairness and amend Chapter 53 of Title 31 of the introduction of the first Bill Simplification Act of 2010 (‘the the US Code by adding a new that would regulate and license Wyden Bill’). All three Bills would Subchapter V to follow Subchapter internet gambling. In the 111th add a new Subchapter V to Title IV, which contains the UIGEA. Congress (2009-2010), three Bills 31, Chapter 53, of the US Code. The Bills would provide a were introduced that would, if Subchapter IV of Title 31 contains regulatory and licensing enacted, provide for the regulation the UIGEA. framework in which the Secretary and licensure of some form of Two Bills introduced by of the Treasury would issue licenses internet wagering - one in the Representative Jim McDermott (D- to internet operators. However, the House and two in the Senate. A WA) would amend the Internal type of internet wagering activities companion to the House Bill Revenue Code to provide for the covered by each Bill is different. would address taxation of licensed taxation of entities that might be The Frank Bill would authorize all operators. The Senate Bills would licensed pursuant to the system the forms of wagering (including also address taxation. Frank Bill would institute. The casino games, poker, bingo and Under the UIGEA, state- first, introduced on 6 May 2009, is lotteries) except for sports authorized ‘intrastate’ and tribal- H.R. 2268, the Internet Gambling wagering, while the Menendez Bill authorized ‘intratribal’ wagering Regulation and Tax Enforcement would authorize poker and other activities were excluded if the Act of 2009. The second, games it describes as activities met certain requirements introduced on 25 March 2010, is predominantly of skill (i.e chess, from the definition of unlawful H.R. 4979, the Internet Gambling bridge, mahjong and internet gambling 2 . These Regulation and Tax Enforcement backgammon). exclusions initiated much Act of 2010’ (‘McDermott’s Bill’). The Bills would attempt to clarify commentary about whether one or While H.R. 4979 likely moots H.R. how other laws impact internet more states would authorize some 2268, its provisions appear to have wagering, including the form of intrastate internet been the model for the taxing Professional and Amateur Sports wagering. This article looks at the scheme in S. 3018. Protection Act (PASPA) 5 , the Congressional bills and legislative All the Bills were referred to and Interstate Horseracing Act (IHA) 6 , the Wire Act 7 and the UIGEA. efforts that have been taking place remain in committee. The House in two States - California and Committee on Financial Services Florida - with respect to the held a Hearing on the Frank Bill 03 world online gambling may 2010
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