Massachusetts representative Barney Frank may be the gamblers best friend right now, as he shocked the I-Gaming industry by not repealing the UIGEA, but instead introduced a the Internet Gambling Regulation and Enforcement Act. His proposed legislation will not repeal the UIGEA or replace the Wire Act. Banks and credit card companies who still do business with non-licensed online gaming operators would still be in violation of the UIGEA.

The Financial Crimes Enforcement Network (FinCEN) is given exclusive authority to issue and enforce licenses and regulations. Potential Internet gaming licensees would be subject to financial and corporate scrutiny. This includes criminal background checks of corporate officers during the application process. Operators would also be required to establish a corporate structure in the United States for both taxes and fees.

The bill requires licensed companies to adhere to federal and state income tax laws. It goes further saying that taxes would be collected from players “at the time of any payments of any proceeds of Internet gambling.”

In addition, companies must have appropriate safeguards in place for preventing underage gambling, fraud and money laundering before being issued a license. Licenses are renewable each year under the proposed legislation and are able to be revoked if the company fails to comply with any U.S. federal laws.

As always, keep your eyes here as more will certainly unfold on this legislation.