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New Senate Bill Seeks to Permit Online Wagering

New Senate Bill Seeks to Permit Online Wagering

by Lou on February 27, 2010

Senators Ron Wyden (D-OR) and Judd Gregg (R-NH) introduced their Bipartisan Tax Fairness and Simplification Act of 2010 (S. 3018), which, among other things, permits online gaming.
Though primarily a bill seeking to simplify the federal tax code, an Internet tax would pay for some of the bill’s other proposed changes. Tax concerns aside, this bill is essentially a Senate version of Rep. Barney Frank’s Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267).

The Wyden-Gregg bill would create a federal regulatory and enforcement framework for licensing Internet gambling operators through the Department of Treasury, and would apply to foreign as well as domestic operators.

The bill seeks to give the Department of Treasury the authority to adopt regulations, authorize, suspend and terminate licenses, employ agents, and enforce the Act. Treasury would also be authorized to assess user fees to meet the costs of licensure reviews and administering the Act.

Operators seeking to be licensed would have to apply to the Secretary of Treasury and:

  • Subject themselves to US jurisdiction and all US laws related to Internet wagering.
  • Provide information for review of their financial condition, structure, experience, suitability and criminal background checks.
  • Agree not to accept wagers initiated or terminated in a state or tribal land that prohibits Internet gambling.
  • Ensure that a bettor is of legal age and physically located in a jurisdiction that permits Internet gambling.
  • Combat fraud, money laundering and terrorist finance.
  • Ensure that all taxes and fees are collected from operators and individual bettors; and combat compulsive Internet gambling.

Provisions allow states and Indian tribes to opt-out, thereby prohibiting online gaming within their borders.

The bill also provides that the federal wire statute (18 U.S.C. 1084) would not apply to any wagers with an operator licensed by the Secretary under the Act.

A certain amount of privacy and anonymity would be lost with the passage of this bill, as operator record-keeping requirements call for disclosing the name, address, and social security number of any person placing a bet. Every bettor’s gross winnings, gross wagers, gross losses, and net winnings for the year would also have to be reported.
The bill was referred to the Senate Committee on Finance.

{ 1 comment }

Damien February 27, 2010 at 9:12 pm

Would this bill make it illegal for unlicensed operators to operate in the US? If not what are the benefits of seeking a license?

The costs of compliance is pretty high, especially requiring compliance with state laws on gambling that are often vague, archaic, and confusing.

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