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Legislation seeks to enable some forms of online gambling such as Internet poker and wagering on horse racing

Congress is moving closer to passing legislation that will relieve U.S. financial services companies from implementing bans on Internet gambling as the Payments System Protection Act (H.R. 6870) was approved by the House Committee on Financial Services and appears headed for a possible vote by the full House next week.

Pushed by the committee’s chairman, Rep. Barney Frank, D-Mass., the legislation would delay implementation of earlier legislation that seeks to block Internet gambling. “Adults are entitled to do with their money what they want to do,” Frank has said in explaining his effort to enable citizens to engage in some forms of gambling online.

Generally, opponents of the older legislation — the Unlawful Internet Gambling Enforcement Act of 2006 — maintain that online gambling can’t be outlawed because there are many offshore gambling sites that are difficult or impossible to regulate and many Americans use the offshore sites anyway.

The new legislation also calls for institutions to block Internet wagers on sports, excepting jai alai and horse and dog racing.

If H.R. 6870 becomes law, it will be a boon to the estimated 23 million Americans who play poker over the Web. Jay Lakin, co-owner and VP of PokerSourceOnline.com, hailed the progress of the new legislation on Wednesday.

“Congressman Barney Frank was able to introduce the bill last Thursday and have it marked up and ready to be discussed on the House floor five days later,” Lakin said in an e-mail. “It shows his true passion for this issue and steadfast belief that the federal government should not be determining what consenting adults do in their leisure time.”

The proposed legislation seeks approval for the appointment of a special administrative law judge, who would define unlawful Internet gambling and carry out an economic impact study on compliance costs.

The Frank bill has the support of the Chamber of Commerce, the Financial Services Roundtable, and the Credit Union National Association; they all have criticized the older legislation banning online gambling as unworkable and burdensome.

In a statement, a spokesman for the Safe and Secure Internet Gambling Initiative, which supports the Frank bill, said: “Rather than prohibit an activity millions of Americans enjoy in the privacy of their homes, just as they can in a casino, Congress should create a framework to regulate Internet gambling as a way to protect consumers and collect billions in much-needed federal revenue.”