WASHINGTON (Reuters) - Most forms of Internet gambling would be banned under a tentative agreement reached on Friday by U.S. congressional negotiators.

Pending a review by other lawmakers, the measure could be brought up within hours for passage by the House of Representatives and Senate and then forwarded to President George W. Bush to sign into law.

The measure would be attached to an unrelated measure to bolster port security. Democrats had accused Republicans of pushing the bill to placate its conservative base, particularly the religious right, in advance of the November 7 elections.

"It's been over 10 years in the making. The enforcement provisions provided by this bill will go a long way to stop these illegal online operations," one of the bill's key backers, Sen. Jon Kyl, a Republican of Arizona, said in a statement.

The agreement, a blend of earlier measures passed by the House and Senate, would make it illegal for banks and credit card companies to make payments to online gambling sites.

Efforts to win support for the House version had been opposed by lobbyists representing casino owners and other gambling interests.

The bill would leave out an additional provision of the House bill that would have clarified that a 1961 federal law banning interstate telephone betting also covers an array of online gambling.

Investors in British-based gaming companies such as BETonSPORTS Plc, Partygaming Plc and 888 Holdings Plc are closely watching the U.S. legislation.

Democrats have criticized the Republican-backed measure as an election-year appeal to the party's conservative base, particularly the religious right.

Senate Majority Leader Bill Frist, a potential 2008 presidential candidate, recently appeared at a hearing in Iowa -- the state that holds the first presidential nominating contest in 2008 -- to listen to concerns about Internet gambling.

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It's been a long day here in DC today. I've been monitoring what's going on as Congress rushes to adjourn. Many bad things happened today. This one is just one of several. The Senate just passed this and the House is about to pass it. Our fun hobby with internet wagering is almost over guys. The Republican House will pass this, Bush will sign it and it will become a Federal offense for financial institutions to send money, gamble on the internet or own an internet gambling site that serves the U.S.

It's a sad day to be a Republican and an even sadder one to be a Democrat. So many of these guys are so clueless about so much. This might go down as the worst Congress ever. So much other stuff is coming down, it's just pathetic. We aren't safe from terrorists, our civil liberties aren't safe and now even our hobbies aren't safe.

God bless America, land of the free?

This should make the local guys happy. No doubt they have lost customers to the internet. Those who still want to get action will. They should just legalize it in the form of a lottery where instead of telling the guy you want to play 123 boxed you just tell em you want the Bears -3.5.

I am and will continue to be engaged politically. However, I cannot think of a time that I have been less pleased with governance on every level. Federal, state, city and even god damend "community leaders" have me shaking my head on a daily basis.

Couldnt you easily get around this by using netteller or firepay to deposit money?

I am also involved Dolphin. And I am very disappointed in our Illinois representatives and Senators. We knew the Rs would vote for it. Kirk and Hyde are card-carrying members of the morality police. But I expected more...alot more from the Democractic reps (only two in the House voted against it). I'm also very disappointed in Sen. Obama and Sen. Durbin. They played the weasels, and that role does not become them. For them to participate in this cabal and not even request a roll call and allow this to pass on an unrecorded voice vote, is a disgrace to government by the people. Now they can all hide behind the cloak of "I didn't vote for that".

The official estimate in the Congressional record is that offshore gaming is a $6 billion industry. This is peanuts. How small is this? So small, it is only equal to the annual budgets of the City of Chicago and Cook County. Think about how small that is in the grand scheme of things in the US economy. The total of all US gambling money going offshore is only equal to what government spends in Chicago. We're talking about a very small time economic impact here. They are targeting a measly $6 billion, while ignoring our $9 trillion federal deficit. We send a LOT more than $6 billion a year overseas on foreign industries....imported cars, oil, beer and wine, foreign travel, to name a few. That's why this isn't about economics, taxation, terrorism, money laundering, or protecting children. If they were concerned about all those things, there are 100 other laws they could have passed that would have greater effect on those issues. Nope, this is all about the Republican morality police run wild. And the Democrats went along and played the fools very well.

C2C - what does this do to the online horse racing sites?

The Republicans who wrote this legislation conveniently exempted horse racing from it. This is another aspect of this legislation that has been overlooked. The state is sponsoring horse racing and lotteries, but wants to crack down on poker and sports gambling. The real reason for the exemption though is that none of our Congressmen and women want to do anything to upset the horse owners and track owners who give so much money to them in campaign contributions. When the campaign contributions to incumbent Congressmen is made public, look at how much comes from the horse racing industry. In fact, the bill so specifically exempts horse racing, it appears the racing guys helped the Congressional staff write the bill. The guys at Arlington Park, for example, are huge contributors to local Congressmen. They actually think that people like us are now going to bring money to their track and bet on the horses instead of football? Not a chance. In fact, I suspect they will get hit by a gamblers backlash. I have spoken with several people who are adamant that they will never again set foot at a horse track, specifically because of their part in this fiasco.

Conns, It is the netellers and firepays of the world that will be specifically targeted. There is a 9 month period following passage in which the US Govt. can establish "implementation" rules. The goal of the legislation is to bar US banks from doing business with intermediary, offshore banks like Neteller, that also deal with gambling houses. It is expected that Neteller will be specifically named as an offshore company that facilitiates transactions and it will be a Federal offense for a US bank to facilitate EFTs with them.

The best alternative for US gamblers who want to continue gambling offshore may be to have Swiss bank accounts. For a variety of reasons, I won't be among them though. I'm not going to take any chances on committing a Federal offense.