Senate Passes Internet Gambling Prohibition Bil

The United States Senate on Saturday passed the Unlawful Internet Gambling Enforcement Act, prohibiting the acceptance of any payment instrument for the use of Internet gambling.

According to a Washington source close to the situation, around 1:00 am Friday Senate Majority Leader Bill Frist, R-Tenn., who has attempted to attach an I-gaming measure to several must-pass bills in the last few weeks, tried to tack it on to the SAFE Port act (H.R. 4954), but committee members turned him down.

But, the source continued, Rep. James Sensenbrenner, R-Wis., was promised he'd get his port security bill and Frist's number one priority before the end of his term was the I-gaming bill, so after a day-long fight in committee, Frist was ultimately successful early Saturday morning. The Democrats objected to including the I-gaming measure on the port security bill, but they weren't willing to give up the bill altogether and the Republicans used their majority to get the measure included.

Since returning from summer break, Frist has seized on I-gaming as his number one priority. He tried first to attach it to the FY 07 Department of Defense Authorization bill, but Armed Services Committee Chairman John Warner, R-Va., objected to adding provisions he considers inconsistent with the scope of the DOD bill.

The provisions Frist added to H.R. 4954 update H.R. 4411, introduced by Rep. Jim Leach, R-Iowa, which target U.S.-based banks, credit card companies and other Internet payment systems, prohibiting them from making payments to online gambling companies.

"Credit card processing will shut down fairly quickly," the source said. "And over the next few months regulations will be developed on how to deal with other payment processors, such as ACH. And wire transfers I expect to still be available for the next 270 days."

The source added that whatever large companies turn away from the U.S. as a result of the law, other small companies will pop up to take their place.

President George W. Bush is expected to sign H.R. 4954 into law by the end of this week, but it wouldn't take effect for 270 days.

Click here to view the port bill (including the I-gaming language).