Some members of the U.S. House of Representatives are trying to get a federal legalization of online gambling so they can regulate and tax the industry. Such initiatives would overturn the Unlawful Internet Gambling Enforcement Act of 2006, which – though it didn’t outlaw online gambling – does allow the feds to go after financial institutions used in “unlawful” online gambling transactions. There is currently no federal law that bans online gambling, though it is banned in a few states.

The push to overturn UIGEA and regulate online gambling in America has been led by Democrat Barney Frank (D-MA) and Republican Ron Paul (R-TX). My personal opinion is that Paul wants online gambling legalized because the government has no business telling people what they can and can’t do with their money and Frank wants it regulated because he loves the government controlling and taxing businesses.

Since the Frank-Paul bill was introduced – but not yet brought to the floor –Jim McDermott (D-WA) introduced a companion bill called the Internet Gambling Regulation and Tax Enforcement Act. It has been co-sponsored by Earl Blumenauer (D-OR), Frank and John Larson (D-CT).

Last week McDermott’s bill was brought before the House Ways and Means Committee, which is the chief tax-writing committee in the House. Strangely enough, several members of this tax-writing committee – such as Charlie Rangel (D-NY) – have used ignorance of the tax code as defense for tax fraud.

Anyway, last week the committee looked at McDermott’s bill and they seemed unimpressed. McDermott stated that America was simply driving gambling revenue offshore, giving money to foreign countries that America desperately needs. He also said that his bill would generate $72 billion in revenue over 10 years from creating new taxes. Among the new taxes are plans to tax the players on their deposits up front, taxes on the casinos on the wagers themselves, taxing the players’ winnings and more. Of course, there would also be many different types of licensing fees for the casinos, just like for current brick and mortar casinos.

Two representatives from Nevada weren’t too big on the bill, which isn’t surprising, since they have to look out for the interests of Las Vegas. Republican Dean Heller said he would keep an open mind, but he is concerned about online gambling’s impact on the Vegas strip. He is also against the “deposit tax” that would take money away from players up front, whether they win or lose at the casino. The other Nevada representative on the committee, Democrat Shelley Barkley, said she supports the legalization of online gambling, but not the taxing of it – at least not right away.

I know what you’re thinking? What? A Democrat is wary about adding a new tax? How can that be? Also surprising for a Democrat, she made a good argument. She wants to legalize and regulate the new online casino industry and let it develop first before taxing it. “Because the industry is not even established yet, I can’t imagine how we can know with any degree of certainty how the special tax would affect operators or customers,” she said. Instead, she says that it should be legalized and regulated, but should not be looked at as a source for revenue. Wow, now she’s sounding like a conservative.

No decision was made on whether to move forward with the bill. This is Washington; things move slowly.

“I understand that America is a mess right now. Unemployment and the economy are in a dismal state. It is my number one priority to solve these problems and fix the economy. But people, don’t spend money! Save it! Stuff it under your mattress! Keep it away from the greedy banks and don’t spend it on frivolous things! Hoard your money because you’re going to need it!”

Obviously, saying something like that would be terrible for the economy and is the exact opposite of what the country needs. It’s also a loose paraphrase of the words of President Barack Obama. Throughout his year in the White House and even before, Obama has made it clear that he’s not a fan of capitalism, taking every opportunity to portray businesses as greedy, people as being in need of handouts, and the government being responsible for taking care of the people. That would be fine, except that he is the president of a country that has a Representative Republic system of government and a capitalist form of economy. His attitudes are not only counterproductive, but also downright dangerous for both.

The most recent of many examples of this is Obama’s criticism of Las Vegas and people who visit the city. Obama recently said that people saving money for college shouldn’t waste their money on gambling in Vegas. Last February, he made a similar remark about companies that received TARP funds, saying that it was irresponsible for them to take trips to the Sin City.

It’s no surprise that an anti-capitalist wouldn’t realize that trips to conferences and junkets in places like Las Vegas are an important part of the process of obtaining and retaining clients. But at least in that case he was criticizing the spending of money by companies that had received money from taxpayers. In his recent comments, he criticized private citizens for spending their own money.

Lawmakers and businessmen in Vegas are understandably furious and many have vowed to support whoever runs against Obama in 2012. They recognize that his comments and policies are bad for Las Vegas, the state of Nevada, and the country as a whole.

While the entire country has a dismal unemployment rate of 10% — you know, the catastrophic number that Obama said we would reach if he didn’t get to pass his “stimulus” bill – Nevada is even worse, at 13%. You should also note that both are conservative estimates that don’t count people with part-time jobs, those who have given up looking for work, and those who work on a temporary project. And with unemployment that bad and Nevada’s tourism industry struggling, the President of the United States, the most powerful man in the country (with the exception of George Soros and Al Gore), is telling people not to visit Las Vegas and not to spend money in their casinos, which just so happens to be the biggest industry they have in the state. Real responsible, Mr. President.

People of the United States and the rest of the world, spend your money as you see fit. You should of course be responsible, but if you have the disposable income to take a vacation, I can think of no place better than Vegas. Of course, as I’ve said countless times, you should never wager money that you can’t afford to lose, but if you can afford to lose it, Las Vegas would be happy to have it.

Barney Frank has some friends in the Senate. Okay, probably not friends. I find it hard to believe anyone could actually like the guy, but Frank now has senatorial support in his fight to overturn the online gambling ban. Senator Robert Menendez, one of the few New Jersey politicians not currently under indictment, has introduced legislation that would repeal the Unlawful Internet Gambling Enforcement Act (UIGEA), a bill almost identical to that proposed by Frank in the House of Representatives earlier this year. So, let’s update our tally of those fighting UIGEA: the U.S. House of Representatives, the U.S. Senate, the World Trade Organization, and iMEGA.

Both bills seek to legalize and regulate online gambling. Ever since the passage of UIGEA in 2006, there has been controversy and confusion regarding which types of online gambling are legal and which are illegal. The new legislation would make it all legal and, of course, tax it like crazy. UIGEA is being attacked both on the belief that it is unconstitutional and on the belief that it would stimulate the economy, adding revenue from online gambling to a hurting economy.

I know what you’re thinking. Since when are Democrats concerned with stimulating the economy? I’m having a hard time wrapping my head around it myself. The best answer I can come up with is that their unwillingness to help the economy is trumped by their desire for new taxes. If there’s one thing the Democrats love to do it’s tax you, and if they have to provide minor stimulus to the economy to do it, then so be it. On the other hand, since when does the government taking more money stimulate the economy? Repealing UIGEA would do nothing to create jobs or put extra money in the pockets of citizens, so it’s unlikely that there would really be much, if any, stimulative value in the proposed bills. Ah, finally it makes sense. It’s just about the greedy government wanting more money. So, politics as usual.

A recent poll conducted by the betting exchange found that there are two major factors weighing on the minds of internet gamblers, the US government’s freezing of assets back in May and the recession. The fact that the US government overstepped their authority, or what I like to call “doing what the government does best” by seizing funds to be paid out to winning players is a major concern among online players – at least those who know about it. The survey showed that 88% of the players were concerned about the security of their money and 76% moved to different sites as a result. However, only 42% of the players in the United States were aware of the freezing of assets from PokerStars, Full Tilt, Ultimate Bet and Absolute Poker.

 The poll also showed that 52% of the US players are spending less money in online casinos than the previous year due to the recession. So basically, online players are worried about the government stealing their money and about the government trashing our economy by spending too much of their money. Both problems seem to stem from the same principle: the government cannot be trusted with your money. The players’ worries about the government is the hurting online casino business, which should come as no surprise, because the current administration of bad for every other business as well, though it is good for the United Auto Workers union (UAW) and lawyers that love frivolous malpractice lawsuits. So if the online players want to make some real money they should probably join the UAW.