Online gambling legislation was introduced on May 6

On Wednesday U.S. House Financial Services Committee Chairman Barney Frank introduced his online gambling draft bill which purports to throw down a 3-year-old ban on Americans placing online bets. The new legislation known as the Internet Gambling Regulation Consumer Protection & Enforcement Act would establish a federal regulatory and enforcement framework for online gaming.

The bill statutes stipulate that the U.S. Treasury Department would have an authority to establish regulations and license Internet gambling operators. Besides, the Treasury would also be able to terminate license of any business who violates the law. Enforcement measures would also include fines.

Apart from this bill Frank, the Massachusetts Democrat, is also planning to pass a legislation to freeze the enforcement of the previous regulation that prohibited internet gambling under a a Bush administration-era law.

Reports about the possible elimination of a pestering ban led the stocks of online gaming companies PartyGaming and 888 higher. Shares of 888 gained 7 percent to 104.75 pence, and PartyGaming rose 6 percent to 276 pence.

The bill immediately produced a negative reaction on the part of Republicans. 

"Illegal off-shore Internet gambling sites are a criminal enterprise," said Representative Spencer Bachus, the top Republican on the financial services committee. "Allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," said Bachus from Alabama.

Meantime Frank also noted that the bill makes provision that measures would be taken to ascertain if wagers are of legal age, protect privacy and combat fraud and money laundering.