Representative Barney Frank's Internet Gambling Regulation and Enforcement Act (HR 2046), took a considerable hit recently, with the introduction of a letter presented to congress, signed by 45 State Attorneys.

The letter, presented by Senator Jon Kyl (R-AZ), expresses "grave concerns" with HR 2046. The State attorneys general seem to believe the Unlawful Internet Gambling Enforcement Act of 2006, has been successful in that it has "effectively driven many illicit gambling operators from the American marketplace." The Frank bill, they believe "proposes to do the opposite."

Franks bill (HR 2046) purposes to solve the problem of online gambling, through regulation and licensing. It is in these licensing sections, where the State attorneys general seem to take the most issue, believing that significant State power is being eroded away while at the same time increasing Federal powers.

"... by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers. The Department of the Treasury would alone decide who would receive federal licenses and whether the licensees were complying with their terms. This would represent the first time in history that the federal government would be responsible for issuing gambling licenses.

A federal license would supersede any state enforcement action, because ?5387 in H.R. 2046 would grant an affirmative defense against any prosecution or enforcement action under any Federal or State law to any person who possesses a valid license and complies with the requirements of H.R. 2046. This divestment of state gambling enforcement power is sweeping and unprecedented."

Frank's bill does have so-called "opt-out" provisions, which should preserve State's rights in restricting internet gambling, however the letter states that these, "opt-outs may prove illusory." The State attorneys general believe any opt-outs will most likely be challenged by the World Trade Organization, much the way the UIGEA has been.


Edited By Mark Anderson