The Internet Gambling Regulation and Enforcement Act of 2007 establishes a federal regulatory and enforcement framework to license companies to accept bets and wagers online from individuals in the US, to the extent permitted by individual states, Indian tribes and sport leagues. All such licenses would include protections against underage gambling, compulsive gambling, money laundering and fraud.

“The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone,” said. Rep. Frank, who is Chairman of the House Financial Services Committee.

In 2006, the House passed the Unlawful Internet Gambling Enforcement Act, restricting the handling of payments by US financial institutions for unlawful forms of internet gambling. That law prohibits the use of payment instruments by such institutions to handle the processing of any form of internet gambling that is illegal under US federal or state law.

Frank argues that traditional forms of legalized gambling already exist in nearly every state and by continuing to prohibit internet gambling in the US, Americans who choose to gamble online are without meaningful consumer protections. He said that the proposed legislation would institute practical and enforceable standards to bring transparency to internet gambling and provide consumers the protections they expect and deserve.

The House Financial Services Committee will hold a hearing entitled, 'Can Internet gambling be regulated to protect consumers and the payments system?' at a date to be determined in June, 2007.

The US online gaming ban has been a subject of much controversy, and US laws have been the subject of a challenge under World Trade Organisation rules by the Caribbean country of Antigua & Barbuda, a major offshore gaming domicile which relies on the industry for much of its income.

In March 2007, a WTO Dispute Resolution Panel concluded that the USA has failed to comply with a 2005 ruling that it should change its legislation banning payments to offshore gaming web-sites. The original ruling had been confirmed by an Appeals Tribunal in 2006, and the US had asked for time to implement changes. When nothing happened, Antigua and Barbuda went back to the WTO to request a Panel.

The Panel comprehensively dismisses all attempts by the US to wriggle out of the need to bring its laws into conformity with the GATS, either by banning equivalent domestic betting transactions, or by allowing parity for overseas transactions. Antigua and Barbuda could now apply to the WTO for permission to place sanctions on the US.

Charlie McCreevy, European Commissioner for Internal Market and Services, said recently that the US rules against processing of international on-line gaming transactions were a prima facie case of protectionism and that the WTO was a possible venue for tackling them.

He told the the European Parliament: "In order to protect, I'd say, their own business, their industry there, they have de facto prevented foreigners from online betting into the United States. In my view it is probably a restrictive practice and we might take it up in another forum."

However he said that while negotiations were continuing over the WTO's Doha Round, he would not rush to file a complaint. "It's not something of major momentum," McCreevy said.