The internet is used for all sorts of activities. Many people make their living off the internet in the form of online sales or marketing. Even more users go to the internet for keeping in touch with friends, shopping, and playing games.
Before 2006, many internet users also went online for gambling rather than travel to the few states in America where gambling is legal. In 2006, a bill was passed by Congress and then signed into law by then president Bush. The law made internet gambling illegal in America and imposed severe penalties on those who profited from online gambling including companies that simply ran ads promoting gambling.
The move forced many European companies who specialize in online gambling out of the lucrative U.S. market including firms like PartyGaming and 888.com, which are publically traded companies in Europe. One U.S. lawmaker is looking to get the ban on online gambling repealed claiming that the ban has hurt trade ties with the European Union and America.
A spokesman for the House of Representatives Financial Services Chairman Barney Frank said, "The bill introduction should happen in the next month. Mr. Frank will bring back legislation to repeal the UIGEA (Unlawful Internet Gambling Enforcement Act)."
Not all U.S. lawmakers want the ban on internet gambling to be lifted. Lawmakers that support the ban say that offshore gambling sites take billions of dollars in tax revenue out of the economy in America and that the online gambling sites act as a vehicle for money laundering.
In addition to banning online gambling, the law passed in 2006 also banned any company from knowingly accepting payments connected to internet gambling. Another reason cited by Frank for trying to get the ban lifted is that the rules burden the financial industry at a time when the economy is already in crisis.
Companies that pulled out of the U.S. market after the ban was imposed still face possible criminal prosecution for the activities before the ban was passed. One of the founders of PartyGaming, Anurag Dikshit, pled guilty to internet gambling charges, agreed to pay $300 million in fines, and could still face jail time after agreeing to a deferred sentencing arrangement.
EU officials claim that the U.S. put pressure on Dikshit to make a deal, and the pressure showed that the U.S. Justice Department has crossed a line in prosecution of gambling cases. An industry petition has lead the European Commission to begin a formal investigation into whether the U.S. was singling out EU companies for enforcement while letting U.S. based online gambling firms operate.
Reuters reports that sources close to the investigation say that the report is expected to recommend action by the World Trade Organization on Internet Gambling. The report would allegedly be used as leverage in negotiating a solution with the U.S. on the ban. In 2006, Frank advised the Bush administration against signing the bill banning online gambling into law. The ban has reportedly cost foreign online gambling sites billions in revenue after forcing them out of the U.S. market.
