Internet gaming bills are pending in the U.S. House of Representatives, mainly introduced by Barney Frank (D-MA). And the Senate has its own online gaming bill too, the "i-Poker Act," authored by Sen. Robert Menendez (D-NJ).

Both sets of bills appear to set up a federal licensing and regulatory system in the Department of the Treasury. But both allow state and tribal gaming authorities to be approved by Treasury to certify applicants and even take over all regulation.

Both would make it illegal to take bets without the Treasury license. Cheating would be a crime, punishable by up to five years in prison. But there is no penalty stated, other than a 50 percent tax on deposits, for running an honest game without a license.

The i-Poker Act, however, requires the Director of the Financial Crimes Enforcement Network (FinCEN) to make up a list of every unlicensed website that takes bets from the U.S. All banks and other payment processors within the jurisdiction of the federal government will then be prohibited from transmitting money to these website operators.

The bills allow states a short 90 days to opt out. If the governor fails to send a letter to Treasury opting out, that state's anti-gambling laws will be pre-empted. In practice, licensed operators from states like Nevada will be free to operate games aimed at players in big states that can't get their acts together, like California.

There are complicated provisions involving tribes. Dozens of tribes can act quickly to license themselves and others, while demanding other operators not take bets from tribal residents.

The Frank bills have no limit on what taxes states can impose on operators, but limit the federal government to what is called a fee of two percent on deposits. The i-Poker Act increases that to five percent for the federal government and another five percent for states and tribes. This gives big states, where the customers will be, incentives to support Internet gambling operated and taxed by Nevada. Under the i-Poker Act, California gets that five percent tax. (Although, if a player is on Indian land, that tribe gets the full five percent and the state gets nothing.)

Regulating states, like Nevada, can tax gross gaming revenue, or even impose a third tax on deposits, if the operator has a physical presence in that state.

But another set of tax provisions would kill the i-Poker Act. Operators have to file reports with Treasury on every player, including name, address, Social Security number, deposits, wagers, loses and winnings.

Obviously, many players will not want this information given to the IRS. So there will continue to be a market for overseas operators, who will figure out ways to get around the ban on money transfers, for example, by using foreign payment processors and credit cards from non-US banks. The feds will still have problems trying to get at foreign websites, and the money to be made would be too much to pass up.

Which version of the future of Internet gaming will win-Frank's or Menendez's? The online poker operators seem to be behind the i-Poker Act, while Harrah's is backing the Frank bills. Poker alone would be politically easier to swallow.

But the real question is what can get by the Majority Leader of the US Senate, Sen. Harry Reid, Democrat, representing Nevada?

The final version will probably be the one that is closest to what the Nevada casinos want.

Professor I Nelson Rose is recognized as one of the world's leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www.gamblingandthelaw.com.