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The long-simmering issue of online gambling ended last year in surprise legislation banning financial institutions from processing transfers of funds to online gambling Web sites. In an effort to stop billions of U.S. dollars from floating in and out of online casinos, card rooms, and sports books each year, the Republican-backed bill restricts the millions of Americans who gamble online from electronically cashing in on their wins. Gaming groups such as the Poker Players Alliance and the International Interactive Alliance were hoping to block the Internet Gaming Prohibition and Enforcement Act, which passed just before the 109th Congress went into recess last September. But strong efforts by conservative groups lobbying for the ban thwarted those attempts. The most widely used means of transfer of money to and from online gambling sites are financial intermediaries such as Visa, MasterCard, and PayPal. Now those companies and other financial institutions are prohibited from processing payments for online-gambling companies. The law makes it illegal for American companies to accept proceeds from online gambling. State lotteries, fantasy sports leagues, horse-race betting, and Indian gaming were exempted from the legislation. When the bill was added to the Safe Ports Act, which lawmakers knew was likely to pass, lobby groups like the American Gaming Association continued to offer alternatives. One such alternative is the regulation of online gaming. Proponents say the United States should follow the example of Britain and Australia and take a more regulatory approach on the issue, given that roughly 7.8 million Americans spend nearly $6 billion annually on Internet gaming sites. The prohibition-versus-regulation battle was hard-fought last year, and groups say there will still be a lobbying presence this year pushing for carve-outs and a possible overturn of the law. With the legislation backed predominantly by Republicans, online-gambling lobbyists will seek support from the new Democratic Congress. Some even go so far as to say Republican voters who love gambling online might be swayed to switch parties. Brian Darling, director of Senate relations at the Heritage Foundation, promises the issue will remain high-profile this year. Darling says supporters of online gambling “were very vocal in the November elections and will be pushing for initiatives this year” to influence legislation in their favor. “The bill wasn’t a complete prohibition on Internet gaming in 2006,” Darling says, “but I think it’s going to be a big issue in 2007.”
Osita Iroegbu can be contacted at [email protected].

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