If The Barney Frank/Ron Paul online gambling bill becomes law, UIGEA will be repealed and online casino gambling will be legalized and regulated in the United States. Sports betting, though, would still likely be left out.

Yesterday, the Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267), which was concocted by Democrat Frank and Republican Paul, cleared the House Financial Services Committee. By a 41-22-1 vote, the bill to license and regulate online gambling in America passed the committee, paving the way for it to be voted on by the full U.S. House of Representatives.

There are already compromises in the bill, though. Republican Peter King inserted an amendment that emphasizes that sports betting would remain illegal online and offline. King did so to protect the interests of powerful and loved sports leagues in the country, particularly the NFL. King admitted that “the NFL has concerns about gambling.”

To be honest, so do I. Sports betting scandals are terrible for the leagues, the teams and America (just ask the Chicago White Sox or Tim Donaghy). Concerns over game fixing don’t necessarily mean that sports betting should be banned, but it is a legitimate concern.

In any case, the bill passed the House with King’s anti-sports betting amendment. However, that doesn’t mean the amendment will say in the bill. During the full House mark-up, it can still be removed. Another amendment was added by Republican John Campbell and Democrat Brad Sherman. That amendment ensures that online casinos that target U.S. customers would have to be based in America, thus ensuring that the country would profit from the legislation and not lose revenues overseas. Other amendments were added for the protection of players, requiring the online casinos to post the odds of the games, have loss limits and verify the players’ age and location.

The online gambling bill is not yet scheduled for a floor debate and is not expected to be brought to the floor earlier than early September.

Thus far, Gambling Review has published roughly 7 million stories (or at least it seems that way) about the Unlawful Internet Gambling Enforcement Act (UIGEA) and Representative Barney Frank’s attempts to overturn it. Frank thus far has been less than successful. In 2008, Frank introduced a bill in the House that would have repealed UIGEA and was defeated, despite having a Democratic majority in the House. Once President Obama and the new Congress were sworn in back in January, Frank introduced a new bill to repeal UIGEA. The bill so far has 60 co-sponsors, though many are not confident that Frank will succeed his second time around. For various reasons, not the least of which is skyrocketing unemployment and an administration focused on passing healthcare reform, flooring of the bill has been delayed.

In the meantime, some representatives would like to stall. Though UIGEA was passed in 2006, regulations for the law weren’t passed until 2008 and the implementation of the law isn’t set until December 1, 2009. Who says Congress doesn’t get things done quickly? Now a group of representatives, led by Frank and Republican Peter King, have sent a letter to Federal Reserve Chairman Ben Bernake and Treasury Secretary Timothy Geithner asking for the implementation of UIGEA to be delayed. Their reason is that with the economy still in a deep recession, now is not a good time to place more burdens on the financial institutions.

It will be interesting to see if Bernake and Geithner listen to the request. After all, both have claimed time and again that the recession is over, despite all evidence to the contrary. Therefore, agreeing to delay the implementation of UIGEA on the basis that the recession, which they say is over, is putting too much of a burden on the financial industry would seem to be an admission that they are lying, or at least wrong, about the economy. For that reason, like the passage of Frank’s bill, I think this attempt will fail.