The first step towards a possible repeal of America’s internet gambling ban was taken yesterday when the Democrat chairman of the House Committee on Financial Services introduced a Bill to exempt properly licensed operators.

Congressman Barney Frank, who recently described the ban as one of the “stupidest laws” ever passed, launched the Internet Gambling Regulation and Enforcement Act 2007 to establish a regulatory framework for the licensing of operators to accept bets and wagers.

Mr Frank said: “The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone.”

Mr Frank drafted the Bill with UC Group, a British internet payment services provider, and Baker Tilly, the accountancy firm. Kobus Paulsen, chief executive of UC Group, said that last year’s ban had driven internet gambling underground, leaving consumers unprotected. “It is clear that prohibition in the US isn’t working for anyone,” he said.

Internet gambling in the United States was effectively banned last October when President Bush signed legislation outlawing financial transactions involving online gambling. The law, which made it illegal for banks and credit-card companies to make payments to online gambling sites, prompted London-listed operators including PartyGaming, Sportingbet and 888 Holdings to sell or close their US-facing operations.

Under Mr Frank’s proposals, licences would be granted only to operators with the ability to prevent underage and compulsive gambling as well as money-laundering and fraud. There would be an opt-out clause for individual states and Indian tribes as well as for professional sports leagues and college associations.

Analysts said Mr Frank’s proposals had been well constructed to give the Bill an outside chance of succeeding, although most were agreed it could prove a tortuous process.

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