• Business Week, Wednesday, June 6, 2007 10:36 AM

To say the least, it's been an ugly year for global online betting companies. First, in October 2006, President Bush signed into law a bill banning Internet gambling payments to U.S. citizens, effectively rendering off-limits half of the $12 billion industry's customers.

But it got worse when one of the biggest online betting execs, BetOnSports CEO David Carruthers, was arrested and forced to plead guilty to charges of racketeering. As a result, many betting companies either shifted the focus of their business or their business model altogether. The publicly traded companies are barely hanging on.

There may yet be hope for the online gambling industry. Despite the ban and the so-called crackdown on online betting in the U.S., gambling levels have decreased very little, even though only a handful of shady overseas operators still accept American bets. That coupled with accusations from the World Trade Organization that there's a disconnect between federal gambling laws and actual practices, have put pressure on Congress.

Now, a new bill is being considered by the House Financial Services Committee that would once again make it legal for banks and credit-card companies to process payments for online gambling sites. The hearing is Friday. However, a reversal still faces staunch opposition from political conservatives, big gaming companies and other potential real-world competitors.

Read the whole story at Business Week »