Frank Online Gambling Bill Could Prove Detrimental For Gambling Affiliates

July 28th, 2010 – by Glen Farmer

The mark up hearing for Barney Frank’s gambling bill was held on July 28th. The mark up hearing heard a lot of amendments to the bill, but one amendment that had been passed could possibly prove harmful to gambling affiliates who earn their income primarily from American gamblers.

One of the amendments that had been tacked on to the bill an amendment that would prohibit online gambling operators who are currently offering American players a chance to gamble through their sites from receiving licensing in the United States.

While there is no true federal law that prohibits online casinos or poker rooms, the Unlawful Internet Gambling Enforcement Act does prohibit offshore gambling sites from accepting funds from American residents. Furthermore, text was included in the bill that would also block online gambling operators from marketing in the United States.

Due to HR 2267′s amendment covering licensing to current online gambling sites, the current casinos, sportsbooks, and poker rooms operating in the United States and paying affiliates would become truly illegal rather than technically illegal. As such, American players would be prohibited from gambling through these casinos, thus nixing the residual income provided by affiliate programs.

While players will probably still be able to turn to the USA online gambling sites currently available, it is likely that competition from the state side gambling sites would be devastating to offshore websites. Additionally, new corporations could be formed by the same operators to continue their service, and subsequently their affiliate programs, but another amendment added to HR 2267 would make it so that these online gambling companies must have most of their employees, indeed their headquarters, in the United States.

While HR 2267 is still in the committees of the House of Representatives, enough support may have been achieved to move the bill through congress and into law.

A preliminary vote was cast after the mark up for HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. This preliminary vote did not include a rollcall, so the official vote to move the bill beyond the House Financial Services Committee has not yet been cast.

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