It’s time to regulate gambling on the Internet rather than outlaw it, says Rep. Barney Frank, the chairman of the House Financial Services Committee.

Reps. Barney Frank (D-Mass.) and Peter King (R-N.Y.) introduced legislation Wednesday that, if passed, would create regulatory framework for online gambling in the United States, and that is sure to please poker players. But the opposition is formidable and includes conservative groups that view gambling as exploiting the vulnerable, particularly the poor.

“Internet gambling in the United States should be controlled by a strict federal licensing and regulatory framework to protect underage and otherwise vulnerable individuals, to ensure the games are fair, to address the concerns of law enforcement, and to enforce any limitations on the activity established by the states and Indian tribes,” the 48-page bill reads.

In order for an operator to obtain a license in the U.S., they would have to demonstrate their plans to “protect underage and problem gamblers, ensure games are being operated fairly and comply with and address the concerns of law enforcement.”

The bill would require Internet gambling providers to be licensed by the Treasury Department and regulated to protect children and to ensure the games are fair, the bill states. The department would review criminal and credit histories as well as financial statements as part of the application process.

Moreover the bill is careful about making sure individual states and Native American tribes have the right to impose further restrictions on Internet gambling or outright ban it.

A licensing system must “adopt and implement systems to enforce any applicable federal, state, and Indian tribe limitations,” reads one part of the bill.

Another section of the bill indicates that one of the minimum requirements for a licensed operator is to “ensure that no customer who is located in a state or tribal land that opts out…can initiate or otherwise make a bet or wager prohibited by such opt-out.”

The legislation also clearly spells out that sports betting on the Internet is illegal.

“Online poker is a legal, thriving industry and poker players deserve the consumer protections and the freedom to play that are provided for in this legislation,” said Poker Players Alliance Chairman and former Senator Alfonse D’Amato said. “We are grateful for Chairman Frank’s leadership and will be activating our grassroots army made up of over one million members to help him drive legislation.”

“As Americans continue to wager online more than $100 billion annually in a thriving underground marketplace, it is time for Congress to acknowledge that prohibition has been a failure and a new approach is needed,” added Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

“Banning Internet gambling has the same effect as the ban on alcohol had during Prohibition; it merely drives the activity underground, forgoes massive tax revenues and makes criminals out of otherwise law-abiding citizens,” said Youbet.com CEO Michael Brodsky.

Rep. Jim McDermott (D-WA) introduced a companion bill to the King and Frank legislation Wednesday that calls for any operator licensed under the Frank bill to pay a 2% fee to the government on all deposits.

“We are losing billions of dollars in federal and state taxes every year because a prior Administration and its supporters drove legitimate U.S. online gambling off-shore by passing an ill-conceived late-night amendment in Congress that has done nothing except make Americans more vulnerable to scams when they wager online and cost us billions in lost revenue,” Rep. McDermott said.