The bill, which will now go to the Senate for approval, seeks to address the anomaly that online betting in the US, though already illegal, accounts for half of the $12 billion market worldwide. It bans the use of credit and payment cards for gambling, making it illegal for banks and credit card companies to make payments to gambling sites.
The status of online gambling has been confused in the US. A 1961 law designed to prohibit inter-state telephone betting has been used by the Justice Department to prohibit online betting from within the US, but its approach has met with only limited success, with US citizens betting billions of dollars a year on the internet.
The new law seeks to make the illegality of online betting absolutely clear. "Gambling in the United States is illegal unless regulated by the states,'' Bob Goodlatte, one of two Republican representatives sponsoring the bill, told the House Rules Committee. "This legislation honours and recognises that."
Congress voted by 317 to 93 to pass the bill, and it will now progress to the Senate, where previous attempts to pass similar laws have failed.
Though the bill aims for clarity, it has caused concern with its exemption for online gambling on horses. A 1970s law that permitted inter-state horseracing bets was updated as the Internet Horseracing Act, which specifically permitted horse race betting.
But the Justice Department has still pursued cases under the Wire Act against horserace gambling sites, despite the more recent law's legalisation of it. That confusion will not be cleared up by the bill. A proposed amendment to extend the ban to horse racing was defeated in Congress.
Another exemption is given in the bill to online state lotteries. Individual states rely on the lotteries for income and lobbied to keep the lotteries legal. Democrat Barney Frank opposes the bill.
"In general, it seems to me, if people want to do it, we should let them,'' Frank told Bloomberg News. "We are talking about criminalising people's individual behaviour because some of us disapprove of what they are doing.''