Not long ago I warned our readers to not be too confident in the overturning of the Unlawful Internet Gambling Enforcement Act in the United States. There are simply too many reasons the legislation in Congress could fail, as it did last time Barney Frank tried to get it done. I’m not the only one who thinks so.

Tony Cabot, founding member and former president of the International Masters of Gaming Law Association, agrees with me. Considered an expert on gambling legislation, Cabot believes that no law will be passed on a federal level that legalizes and regulates online gambling. Barney Frank has already pushed his House bill back and it likely will not be heard on the floor this year. Expect the same from Menendez’s similar Senate bill. In both cases, online gambling is simply not a priority, with the no end in sight to the recession and no prospect for the creation of new jobs in the near future. In addition, with the administration focusing on healthcare reform, there simply isn’t the time or energy to devote to a bill that would have a minor impact on the economy.

If the bill isn’t passed this year, though, it could be dead, according to Cabot. Next year is an election year and no politician is going to want to give their opponents ammunition by backing a controversial subject like gambling. I agree. Not only that, but the reason Barney Frank is so confident that he will succeed this time where he failed in the past is because he has strong support from Congress that has a strong Democratic majority. However, if the politicians hold off on the legislation until after the 2010 elections, the Democrats could lose that majority and therefore, online gambling would lose its support. Midterm elections are always unfavorable to the party in the White House, and with the approval rating of Obama and Congress plummeting, many experts predict a huge shakeup on Capitol Hill.

Another reason Cabot provided for a lack of optimism is that some online casinos are against the legislation. Yes, you read that correctly. According to Cabot, some of the online casinos that are already dealing with American customers are against repealing UIGEA because it would give them more competition in the market. Some fear that they will even be denied licenses to operate in the United States. Likewise, land-based casinos in the country, especially in Las Vegas, are divided on the issue. Some want online gambling legalized because they want to expand into the online realm. Other casinos are against online gambling because they see it as competition. Senator Harry Reid of Nevada, who is basically a puppet of the Vegas casino lobby, has refused to pick a side on the issue.

Cabot gave 20 to 1 odds for the success of Barney Frank’s bill, but thinks legislation at the state level is much more likely. Sorry to be a buzz kill, fellow gamblers. I’ll try to have better news tomorrow.

Joe Brennan, chairman of internet freedom lobby group Interactive Media Entertainment & Gaming Association (iMEGA) has downplayed reports that they are losing the battle against the Unlawful Internet Gambling Enforcement Act (UIEGA) in the courts.

While Democratic Representative Barney Frank has introduced a bill that would repeal the act, which is really Title VIII of the SAFE Port Act of 2006, iMEGA is taking no chances and is challenging it in the courts, claiming that the title is unconstitutional. Brennan calls the act, which prohibits financial institutions transferring money to unlawful Internet gambling sites, unconstitutional. The problem, according to Brennan, is that the language is too vague and no definition was given by Congress as to what constitutes “unlawful Internet gambling.” Only four states have laws that specifically prohibit online gambling. For the other 46, according to Brennan, a reasonable person has no way to tell whether or not they are breaking the law.

Brennan has a point. If there is no definition provided in the act that explains what gambling is legal and what is illegal, how can someone be expected to obey the law? Even if there was a clear definition, it seems a little hypocritical for the federal government to ban online gambling when 43 states have a state-run lottery, some of which can be played online. Not surprisingly, Nevada is one of the states that does not have a lottery, and Senate Majority Leader Harry Reid, backed by a powerful Las Vegas casino lobby that does not want competition, has blocked attempts to legalize and regulate online gambling in the past. If Frank’s bill passes the House, however, Reid will have a tough decision to make, as his Nevada constituents seem to be split on the issue and his approval rating is already in the gutter.

If Frank’s bill passes both houses, Brennan’s lawsuit against the Department of Justice will be unnecessary. However, after the government froze over $30 million in funds to be payed out to winning players of several online casinos, the debate has heated up. The 27,000 players awaiting their earnings don’t want to wait for Congress. Neither does Brennan.