US gambling ban challenged from within

Just six months after President Bush signed a law outlawing online gambling, a key Democratic politician has proposed lifting the ban.

Representative Barney Frank, a Democrat from Massachusetts and chairman of the House Financial Services Committee, on Thursday introduced a bill that would replace the current broad prohibition with strict regulations, including criminal background checks and financial disclosure, imposed on companies that seek to offer legal internet gambling.

Frank said: "The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone." His bill is called the Internet Gambling Regulation and Enforcement Act (PDF).

Frank argues that because nearly all states already permit some form of traditional gambling - including lotteries, betting on horse and greyhound racing and sports wagering - the federal government should legalise and regulate the online equivalents.

Instead of a blanket legalisation, his legislation would require the Treasury Department to police the industry and ensure that it takes adequate steps to identify minors and compulsive gamblers.

Last year's legislation tried to eliminate many forms of online gambling by targeting internet service providers and financial intermediaries, namely banks and credit card companies that process payments to offshore websites.

Those sites included ones like BetBug of Toronto; BetWWTS.com of Antigua; Bodog Sportsbook, and Casino and Poker of Costa Rica.

Estimates typically put internet gambling revenue at more than $12bn a year.

Declan McCullagh writes for CNET News.com