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By Corey Boles, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Sen. Robert Menendez, D-N.J. is set to introduce legislation Thursday seeking to regulate and tax, rather than ban, online poker, according to an aide to the lawmaker.
It would establish a regulatory framework that would allow online poker companies to register in the U.S. It would put in place consumer protections such as ensuring an individual is logging on from a jurisdiction where gambling is legal, and having accurate age-verification procedures.
The legislation would require other safeguards protecting against compulsive gambling, fraud and money laundering and ensuring the fairness of games.
A 10% tax would be collected on all deposits made by players to gambling sites, with the proceeds split evenly between the state and federal governments.
One of the most vocal proponents of lifting the online gambling ban is the banking industry. Banks say the existing rules don't define what types of gambling are illegal, leaving them unsure whether to reject individual transactions. In some parts of the country, for example, betting on horse racing is legal, but in others it isn't.
The bill would be similar to one backed by House Financial Services Chairman Barney Frank, D-Mass., a noted opponent of the current Internet gambling ban that was put in place in the waning days of the Bush administration.
A key difference would be that Menendez's legislation would only apply to online poker and other "games of skill," while Frank's legislation would regulate other forms of gambling, including sports betting. Neither bill would override existing state laws regarding gambling.
