House Financial Services Committee Passes Bill To Legalize Internet Gambling

Under the proposed law, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act:

  • Internet gambling would be controlled by a federal licensing and regulatory regime.
  • Licensees would be able to accept bets or wagers from persons located in the United States.
  • Financial transaction providers (such as creditors, credit card issuers, or financial institutions) could not be held liable for engaging in financial activities and transactions for or on behalf of a licensee or involving a licensee.
  • The act does not authorize any licensee to operate an Internet gambling facility that knowingly accepts bets or wagers on sporting events from persons located in the United States in violation of section 3702 of title 28, United States Code, except for fantasy or simulation sports games (as defined).
  • States could opt out, and if they did, federal licensees could still not operate an Internet gambling facility that knowingly accepted bets or wagers initiated by persons who resided in those states.

In announcing the passage of the bill, the House Financial Services Committee said that the legislation would “enable Americans to bet on-line and put an end to an inappropriate interference with their personal freedom.” See the House Financial Services Committee press release.

The statement is not really true, because the bill allows states to opt out. Meaning, if it is illegal to gamble online in the state in which you live and your state opts out, then this bill won’t help you.

About Joe Wallin

Joe Wallin focuses on emerging, high growth, and startup companies. Joe frequently represents companies in angel and venture financings, mergers and acquisitions, and other significant business transactions. Joe also represents investors in U.S. businesses, and provides general counsel services for companies from startup to post-public.
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