Earlier today I wrote about how time limits and the strict procedure of the American legislative process could derail any hopes of online gambling legislation passing this year. Did you read it yet? If not, I’ll wait. Go ahead.

That is far from the only obstacle facing Barney Frank and Ron Paul’s Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267), though. Another major obstacle is amendments added onto the bill by congressmen. For better or worse, lawmakers have the ability to tack amendments onto any bill being discussed, even if those amendments aren’t related. Sometimes it is done as a compromise to get more votes for the bill. Sometimes it is done to sabotage the bill by getting those who would otherwise support it to vote against it. Sometimes unrelated bills are tacked onto another bill (like the UIGEA being added to the SAFE Port Act).

Last week, 14 amendments were added to the online gambling bill that would repeal UIGEA and regulate the online casino industry in the United States. One such amendment was added by Brad Sherman, a California Democrat. Sherman’s amendment bans any online casinos that violate existing U.S. laws from receiving a license to operate in the country once HR 2267 is passed. Since federal laws on online gambling are extremely vague – when they exist at all – it is hard to say which online casinos are in violation of U.S. laws and which are in the clear. Therefore, that amendment’s impact is unknown, but it could cost a lot of online casinos the ability to accept U.S. customers. The online gambling lobbies, obviously, are not happy with Sherman’s amendment.

That wasn’t the only amendment added during the mark-up that hurts the bill. A similar amendment by Spencer Bachus (R-AL) and Michele Bachmann (R-MI) forbids overseas companies that have engaged in illegal online gambling business in the U.S. from receiving a license. It also bans anyone who had been employee of said companies from obtaining a license. Peter King (R-NY) added an amendment that prohibits sports betting.

Another amendment by Sherman allows states a full legislative session to opt-out of online gambling. Interestingly, an amendment by Joe Baca (D-CA) that allows states and tribes to opt-in to online gambling was defeated. So I guess they can opt-out but not opt-in.

The biggest head-scratcher was another amendment by Baca that would have allowed Native American tribes to participate in online gambling. Frank, as Chairman of the Financial Services Committee, denied the amendment without allowing a vote on the basis that the amendment is not germane, meaning it is not relevant to the subject of the bill.

Excuse me? That seems pretty relevant. You want to legalize online gambling in the United States but don’t think the question of whether members of Native American tribes are allowed to participate is relevant?

First of all, the “not germane” argument is only used when a congressman doesn’t want something to be voted on. Unrelated amendments are added to bills all the time. The only conclusion I can draw from this decision is that Barney Frank wants you to be allowed to gamble online, as long as you’re not one of those Indians.

Whether the post-mark-up bill will have more or less support from Congress is unclear, but with no urgency to pass a similar bill in the Senate, it may not matter. For that reason, though it’s still early, Frank and Paul’s online gambling regulation bill just may be dead.

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.

It’s not often that I agree with Shelley Berkley, or any Democrat for that matter, but she had a rare moment of common sense this week. In a Roll Call article, the U.S. Representative from Nevada criticized the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

Berkley stated that the UIGEA does nothing to protect the American people from dangerous online casinos and is also ineffective in preventing online gambling. She also pointed out that the “law doesn’t even make clear what is illegal gambling and what is not when it comes to the Internet.” She said that the law takes enforcement out of the hands of the correct agencies and instead pins “a cyber ‘tin star’ to the chest of the financial industry with the idea that these companies would become the new ‘virtual sheriff’ in town.

UIGEA never defines what online gambling is illegal and there is no federal law that does so, either, though the Department of Justice considers the practice to be against the law. Of course, the DOJ often invents new rules and laws like that, despite a lack of authority to do so. The UIGEA simply places the burden on the financial industry to make sure no “unlawful” online gambling payments are processed, without even defining what is unlawful. It is an unfair burden on an already hurting industry and it is bad for online gamblers throughout the country.

In the article, Berkley compares UIGEA and the de facto ban on online gambling to the prohibition of alcohol during the 1920’s and 1930’s. It’s always funny when liberal Democrats use Prohibition as an example, considering that the law was passed during the Progressive Era, when big government took unprecedented control over industry and the private lives of American citizens all in the name of the “greater good.” Progressives of that time period are heroes of the big-government liberals of today, yet they’re happy to denounce Prohibition. I guess they’re fine with the government controlling everything else, but they also enjoy their booze.

Ideology aside, Berkley is right. During the Prohibition, the government tried to keep Americans from drinking, but instead it just made them more secretive about their drinking. It also had the added bonus of giving power to gangsters like Al Capone. UIGEA and the unlawful de facto ban on online gambling does not prevent Americans from gambling at online casinos, but it makes them hide it and it keeps those casinos away from the watchful eyes of regulators.

Of course, government regulation isn’t necessarily a good thing. The two most heavily regulated industries in the United States are the oil and financial industries and we’ve seen a bit of damage to those lately. Additionally, government regulation of online casinos would most likely result in the players being charged more, such as the poker rake increase we’ve seen in France.

Whether the U.S. government should regulate online gambling is a question open to debate, but one thing is certain: The government needs to stop trying to prevent people from spending their own money as they please. Like during Prohibition, this is a case of the government thinking they know better than the people and we have seen time and again that nothing could be farther from the truth.