Next: Federal Department of Internet Gambling?

Next: Federal Department of Internet Gambling?

A war over online gambling is about to spill out in Congress as opponents move to restore a long-standing Internet gambling ban and block Uncle Sam from creating a sprawling new federal department to police the web.

Rep. Jason Chaffetz, R-Utah, and Sen. Lindsey Graham, R-S.C., plan to introduce legislation next week to challenge two bills introduced earlier this session that would either create an “Office of Internet Poker Oversight” in the Commerce Department or a broader “Office of Internet Gambling Oversight” in Treasury.

Those bills, also sponsored by Republicans, were inspired by states eager to cash in on gambling and the Justice Department’s abrupt December 2011 move to re-interpret the 1961 Interstate Wire Act that effectively banned Internet gambling.

Without informing Congress beforehand, Justice reinterpreted the law to outlaw only sports gambling, opening the door for states to legalize online gambling and lottery games.

In addition to dividing Republicans, the legislation has split the casino community.Backing online betting is Democratic donor and casino investor George Soros. The American Gaming Association also hired former Obama campaign manager Jim Messina to help on the issue.

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