It seems that U.S. Representative Earl Blumenauer (D-OR) has changed his mind about online gambling. Four years ago, he joined the majority in voting for the Unlawful Internet Gambling Enforcement Act (UIGEA). Though the bill doesn’t actually ban online gambling (a fact reinforced by a recent Supreme Court decision), it does allow the federal government to go after financial institutions that are involved in transactions that are considered “unlawful” internet gambling transactions. Which transactions are unlawful is anybody’s guess – that’s one of the problems with the law – but many people believe it only applies to states that have banned online gambling.

Though he voted for a government restriction of online gambling in 2006, Blumenauer now says that he was wrong to do so. Yesterday he released a statement saying that the United States is missing out on gambling revenue that could help states and the federal government with their budget problems. In addition, he believes that allowing online casinos to operate in the U.S. would create jobs.

Blumenauer also suddenly realized that restricting online gambling is hypocritical, since fantasy sports, horse racing and state lotteries are exempt from UIGEA’s rules. So Blumenauer has finally seen the light. Good for him. I wonder who pointed it out to him (maybe he’s been talking to Ron Paul).

There is a popular misconception that Democrats are for legal online gambling and Republicans are against it. They say that UIGEA was pushed through Congress because the Bush administration wanted it done and Democrats have been fighting it ever since.

Like much of the popular opinion regarding politics, that is inaccurate. UIGEA was passed in 2006, during Bush’s second term. That much is true. However, the bill, which was part of the SAFE Port Act, had overwhelming bipartisan support. In fact, it had a type of bipartisan support that is rare in such a polarized era. The bill passed the House of Representatives by a vote of 421-2, with 9 representatives not voting (why members of Congress can abstain from voting so often when that is their only job is another story). It then passed the Senate by a 98-0 vote, with 2 senators not voting. After differences in the House and Senate versions were resolved, the conference report was then passed by the House 409-2, with 21 representatives not voting.

Two, folks. Two people voted against the bill. Of those two who voted against the bill, one was a Republican (Jeff Blake of Arizona) and one was a Democrat (Edward Markey of Massachusetts). Barney Frank, the current “patron saint” of online gambling, did not vote.

This is the legislation that he now deems to important to overturn, yet he didn’t even vote on it. Not an aye, not a nay. Nothing. Keep in mind that UIGEA was part of the much larger SAFE Port Act, which was concerned mostly with port security, but to say that it was a Republican bill that Democrats opposed isn’t exactly accurate, considering that only 1 Democrat voted against it and just as many Republicans did as well. Now, I don’t support either party, because they both suck (though I think Republicans suck less), but it’s time for some people to get their stories straight.

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.