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.

The U.S. state of South Carolina is considering revising their gambling laws, which have existed unchanged since 1802. As is often the case with governments, even at the state level, things move slowly. There was outrage in the Palmetto State when several dozen people were arrested and charged with illegal gambling when a Mount Pleasant home was raided in 2006. Their crime was playing poker, which is in violation of the state’s gambling laws, which are among the strictest in the nation.

The 207-year-old laws make all card and dice games illegal. The crack team of journalists at the Post and Courier and virtually every blog that has used that newspaper as a resource have reported that using a strict interpretation of the law, playing the board game Monopoly with your family is against the law. Rhetoric like that has enflamed the public and may be the catalyst for changes in the state constitution.

Before we get into all of that, though, let’s get to the facts. South Carolina may have very anti-gambling laws on the books, but they’re not going to throw grandma in jail for playing Yahtzee at home – or even for playing poker, for that matter.

Ed Knisley prosecuted the players arrested in the Mount Pleasant raid and he said that it wasn’t a small game between friends. According to Knisley, the defendants “were part of a large group involved in a setting up quasi-professional casino-style poker games, with numerous tables set up at each commercial location, using paid dealers.”

In addition, Knisley said that although the gambling laws are vague enough that Monopoly could be considered illegal, the authorities look at the intent of the legislation. He stated that it’s not a crime to play card or dice games “for amusement,” but it was a different matter when betting is involved.

Five of the men arrested in the Mount Pleasant raid were convicted in February of this year. From 2006 until now, there has been a lot of confusion about what is legal in the state and the Poker Players Alliance, among other groups, have been pushing for a rewriting of the laws. They may get their wish.

A new bill has been proposed in the state House and has cleared a subcommittee by a 4-1 vote. The bill would make changes to the gambling language, clearly outlining that it is perfectly legal for non-profit organizations to hold raffles to raise money. In addition, the legislation would specify that social gambling, such as home poker games, are okay. The bill would also allow state residents to vote on whether to amend the state constitution to allow betting events by churches, schools and other charitable organizations.

This may have all come about because of a misunderstanding, but this bill seems like a good thing for the state. In addition, the PPA and other gambling advocacy groups are hoping that it is a foot in the door that will eventually lead to an expansion of gambling in South Carolina, including casinos. Only time will tell, but don’t hold your breath. After all, it took us 207 years to get this far.

Gambling law in Alabama may soon change. The state has traditionally been against gambling, but recent events have some people, the residents as well as politicians, reconsidering their position. Electronic bingo machines, which are currently illegal, have sprung up across the state, but so far nothing has been done about it. Governor Robert Riley was frustrated with the fact that the city police and attorney general seemed to look the other way. In response, he formed a Task Force on Illegal Gambling last year.

One of the first actions of the task force was to raid three establishments believed to be housing illegal gambling, which include Country Crossing, VictoryLand and the White Hall Entertainment Center. However, since they did not have a warrant, a judge ordered that the raid be halted. VictoryLand then filed a restraining order. Since then, a warrant has been issued to search the establishments and in response, the businesses have closed indefinitely to avoid being raided.

And that’s where things get tricky. If the businesses are indeed running illegal gambling operations, Riley is well within his rights by going after them, though many in the gambling community see him as an evil anti-gambling activist. The attempted raids and subsequent closings, however, have stirred up controversy in the state and now it seems that the people don’t even agree with the gambling ban anymore.

Once a strong anti-gambling voice, the people of Alabama have seen their state, like the rest of the country, mired in a bad recession. Jobs are scarce and with those businesses shut down, the economy is hurting even more and countless workers are wondering if they still have jobs. As a result, a recent poll by the Christian Coalition shows that 2/3 of the people of Alabama are opposed to Riley’s gambling raids and a poll by the Public Affairs Research Council of Alabama found that 72% of the people are in favor of regulated gambling in the state and only 25% want gambling outlawed.

In response, Riley’s popularity in the state is falling and state Representative Marcel Black introduced a bill that would allow the voters to decide whether or not to legalize gambling. At this time, shutting down illegal gambling is perfectly constitutional, but doing so could hurt Riley. With thousands of jobs at stake, no one wants to be the guy who made the unemployment situation in Alabama even worse. For that reason, it may be best to let the people vote and see what they decide. In the meantime, do nothing. It may turn Riley’s stomach to turn a blind eye to illegal activity, no matter how harmless, but it may be what’s best for the state, his reputation and that of his party.

You know how those kids who were always picked on by the bullies ended up being the smart, successful people in life while the bullies spend their time in prison, working at a convenience store, or both? Well, I think those crafty Ukranians can fit in the former category. Ukraine is best known for constantly getting its head dunked in the toilet by the bully Russia, but all of that time being victimized has helped them learn some ingenuity and resilience.

Faced with a ban on gambling, Ukranian businesses got creative. Internet clubs have recently sprung up all over the place. In these clubs, people pay for club for access to a computer. They then play multiple gambling games online. When their money runs out, they pay the club for more. The servers for the websites they are visiting are offshore and thus, not affected by the Ukranian ban. By all accounts, unless the Ukraine decides to ban online gambling, this circumvention of the gambling ban is completely legal.

Even so, it is expected that these internet clubs will have some legal battles in their future. Legislation may outlaw online gambling or may come up with certain restrictions for it. A higher priority, though, is shutting down some casinos that are still operating illegally in the country. For now, however, Ukranians are enjoying their online gambling thanks to the loophole in the ban. Good job, Ukraine. I knew you would turn out okay, no matter what that mean Russia said about you.