High Stakes Showdown: Internet Gambling Debate Rages on Capitol Hill

With just two weeks to go before a federal law aimed at quashing Internet gambling takes effect, a handful of House Democrats, including Rep. Barney Frank, D-Massachusetts, are going all in, pushing for the legalization of some of the most popular forms of online gambling. The lobbying is intense, and the stakes are high – by some estimates the Internet gaming industry generates as much as $6 billion a year in profits – and no one on either side of the debate appears ready to fold.

Meanwhile, in an exclusive interview with ABCNews.com on Tuesday, Rep. Spencer Bachus, R-Alabama, the Ranking Member of the House Financial Services Committee, said he would do everything in his power to stop the legalization of Internet gambling, specifically singling out online poker.

A picture of a casino.

"Internet gambling is the crack cocaine of gambling," Bachus told ABCNews.com. "Young people are particularly vulnerable – we don't want to put a casino in every dorm room in the country. Compulsive gambling, by many accounts, is a very serious, growing problem."

Among the many recent developments in this ongoing battle royale:

Rep. Frank, the powerful chairman of the House Financial Services Committee, is scheduled to appear today before the House Ways and Means Committee. He will testify on the federal tax revenue implications of legalized online gambling. Depending on which side produces these estimates, tax revenues from online gambling could range anywhere from $10 billion over ten years to more than $800 billion over five years. Frank is sponsoring HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, to establish a framework for the legalization of online poker and other casino-type gambling.

The Poker Players Alliance, a Washington, D.C.-based lobbying organization, petitioned the Federal Reserve and the Department of the Treasury to exempt online poker venues from the Unlawful Internet Gambling Enforcement Act, which takes effect June 1. Passed by a Republican-controlled Congress in late 2006, the act prohibits the use of any banking instrument -- such as a credit card, check, or electronic funds transfer -- from being used for illegal online gambling transactions.

Implementation of the law has been subject to numerous delays, including a six-month postponement granted in November by the Fed and Treasury, partially at the behest of Rep. Frank and Sen. Harry Reid, D-Nevada.

Last week, a cadre of GOP lawmakers, led by Rep. Bachus, wrote to Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner, strongly urging them to deny the PPA's eleventh-hour bid to redefine what constitutes illegal gambling so as to clear the way for banks to do transactions with online poker sites.

Al D'Amato at the Table

Defenders of online poker, specifically the PPA, argue that everyday citizens should have the right to enjoy a simple American pasttime, regardless of whether they are in the backroom of a barbershop, or in cyberspace.

"Why is it OK for a group of friends to sit around the kitchen table and play a friendly game of poker, but not OK for people to play over their computers?" asked former New York State Republican Senator Alfonse D'Amato, now the chairman of the PPA.

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