The U.S. Congress finally held a formal hearing addressing Barney Frank’s legislation to regulate and fully legalize online gambling — particularly online poker — in the United States.

At the hearing, representatives from the gambling industry were allowed to speak. Most of the charges they ended up defending themselves against revolved around the risks of identity theft to online poker players.

Indeed, the main argument that U.S. conservative politicians are making against legalizing online poker seems to be the risk of identity theft — a strange shift in tactics from their previous resistance to online gambling on “moral” grounds, or out of concern for “problem gamblers”.

So what was accomplished at the hearing? Nothing definite. The best result is the fact that Congress is finally willing to give the issue time. That, combined with the recent delay of the UIGEA implementation, can be seen as a hopeful sign.

Indeed. Hopefully this issue will get a serious hearing, and Americans will once again be free to play online poker, safely, securely, and legitimately.

Read more from PAP Newswire…

“Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families,” said Menendez. “By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times. The safety benefits of the bill are particularly crucial. Parents are worried about their children falling prey to illegitimate gaming sites and thousands of Americans have been fleeced of millions of dollars by these sites. With proper regulation, we can prevent minors from playing poker online, crackdown on predatory operations, and sanction the legitimate ones.”

Menendez’s plan would add a 10 percent tax on all deposits at online poker rooms, to be split between state and federal governments.

Menendez’s bill is comparable to the earlier House bill introduced by Rep. Barney Frank, except that Menendez’s plan would apply only to online poker and games of skill, whereas Frank’s bill would regulate all Internet gambling other than sports betting.

Analysts anticipate that the new legislation will be strongly supported by financial institutions, who have been tasked with filtering online gambling transactions from their customers accounts, which places additional burdens on an industry already strained under increasing regulation and political scrutiny.

Read more from Senator Menendez’s press release.

From the CAP Newswire:

After months of anticipation, U.S. House Financial Services Committee Chairman Barney Frank has introduced into the U.S. Congress new legislation that would not only reverse the UIGEA (Unlawful Internet Gambling Enforcement Act of 2006), but would also establish a legal regulatory framework to allow online gambling in the United States.

The new bill, officially called the Internet Gambling Regulation Consumer Protection & Enforcement Act, would give the U.S. Treasury Department the authority to regulate how Internet gambling is conducted in the country. This would be accomplished through a system of licensing of gaming companies; the Treasury Department would have the authority to issue or revoke such licenses. [ read more ]

Also reporting on this bill is iGamingBusiness:

According to our friends at the Safe and Secure Internet Gambling Initiative, the legislation is expected to include a number of significant consumer protections, largely targeting compulsive and underage gambling, money laundering, fraud and identity theft.

Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative said, “We applaud Chairman Frank’s strong leadership to advance a commonsense approach to regulate Internet gambling and reverse the intrusive, ineffective and burdensome prohibition.

“Despite the current prohibition, millions of Americans wager more than $100 billion annually with offshore Internet gambling operators. Rather than tell Americans what they can and cannot do online in the privacy of their homes, Chairman Frank’s approach to regulate Internet gambling would protect consumers and allow the US to generate billions in new revenue to fund critical government programs.” [ read more ]

This is potentially good news for all who’ve been appalled and dismayed by the US government’s nonsensical and anti-competitive prohibition on online gambling. Hopefully the representatives and senators will see the wisdom (and potential revenue) in regulation versus prohibition.