Legislation that would lift an online gambling ban imposed by Congress last year was introduced on Thursday by the chairman of U.S. House Financial Services Committee.
Calling the Internet gambling prohibition "imprudently adopted," Democratic Rep. Barney Frank of Massachusetts outlined a bill to make it legal again for banks and credit card companies to make payments to online gambling sites.
"The fundamental issue here is a matter of individual freedom," Frank told a news conference, adding his committee would hold a hearing on the matter in June.
The bill includes provisions for licensing and regulating online gambling companies to protect against underage gambling, compulsive gambling, money-laundering and fraud.
But Frank conceded, "The votes aren't there to change it right away" and he listed only 11 co-sponsors in the 435-member House for lifting the ban.
Frank said his proposal could face opposition from religious conservatives, and from some liberals who find gambling "tacky." However, he also said the ban imposed by Congress had awakened many voters to the issue and predicted support for the bill could grow.
"There's a group of (voters) who've been activated here," Frank said.
The Internet gambling payments legislation was signed into law last October by President George W. Bush. It had won support from majorities of both Republicans and Democrats.
Supporters of last year's legislation said it was needed to clarify that a 1961 federal law banning interstate telephone betting also covered an array of online gambling.
Critics dismissed the payments ban as a politically motivated bid to stir up social conservatives and boost Republican election prospects.
The ban also irked some in the European Union, which is home to online gambling companies that were forced to withdraw from the U.S. The World Trade Organization in March found U.S. prohibitions on online horse race betting illegal in a complaint filed by Antigua and Barbuda several years ago.
The ban has been closely monitored by investors in some British-based gaming companies, such as Partygaming.
In a crackdown on Internet gambling, U.S. prosecutors arrested BETonSPORTS' then chief executive in July and its founder last month. Two founders of payments processor NETeller were arrested in January.