The legislation would clarify and update current law to spell out that most gambling is illegal online. But there would be exceptions — for state-run lotteries and horse racing — and passage isn't a safe bet in the Senate, where Republican leaders have not considered the measure a high priority.
The House voted 317-93 for the bill, which would allow authorities to work with Internet providers to block access to gambling Web sites.
Critics argued that regulating the $12 billion industry would be better than outlawing it. Said Rep. Barney Frank, D-Mass., "Prohibition didn't work for alcohol. It won't work for gambling."
The American Gaming Association, the industry's largest lobby, has opposed online gambling in the past but recently backed a study of the feasibility of regulating it.
The Internet gambling industry is headquartered almost entirely outside the United States, though about half its customers live in the U.S.
Reps. Bob Goodlatte, R-Va., and Jim Leach, R-Iowa sponsored the bill. They successfully beat back an amendment to strip out exemptions in the legislation for the horse racing industry and state lotteries.
Goodlatte called that "a poison pill amendment," aimed at defeating the larger bill.
Supporters of the measure argued that Internet betting can be addictive and can lead people to lose their savings.
Leach said the problem is particularly acute for young people who are frequently on the Internet. "Never before has it been so easy to lose so much money so quickly at such a young age," he said.
One of the problems with Internet gambling is that it's possible for minors to get access, says CBS News technology analyst Larry Magid. "There is technology that can be used to verify the identity and age of adults, but it's a bit cumbersome to use," he says. "It's mostly used now with online credit reports."
Rep. Shelley Berkley, D-Nev., pushed for removal of the exemptions. She said it was unfair to allow online lotteries and Internet betting on horse racing to flourish while cracking down on other kinds of sports betting, casino games and card games like poker.
Supporters of Internet gambling agreed.
"They call it a prohibition. It's really Congress picking winners and losers," said Michael Bolcerek, president of the Poker Players Alliance, a San Francisco-based group that opposed the bill.
Internet gambling is a multibillion-dollar worldwide industry that is legal in many countries, notes Magid. "Most of the casinos that Americans use are legal in the countries where they're located."
Congress has considered anti-online gambling legislation in the past.
In 2000, disgraced lobbyist Jack Abramoff led a fierce campaign against it on behalf of an online lottery company. Supporters of the bill brought up that history Tuesday and suggested that a vote for the bill was a way to make a statement against Abramoff's influence.
However, the lottery exemption wasn't in the bill back in 2000. If it had been, Abramoff's client probably would have backed the bill. Online lotteries are exempted this time around at the behest of states.
Under the provision that relates to horse racing, betting operators would not be prohibited from any activity allowed under the Interstate Horseracing Act. That law was written in the 1970s to set up rules for interstate betting on racing. The industry successfully lobbied for legislation several years ago to clarify that horse racing over the Internet is allowed.
Greg Avioli, chief executive officer of the National Thoroughbred Racing Association, said the mention of horse racing in the bill is merely "a recognition of existing federal law."
Avioli said the racing industry has a strong future in the digital age and suggested the bill would send Internet gamblers to racing sites and away from the banned sites.
The Justice Department has taken a different view on the legality of Internet betting on horse races. In a World Trade Organization case involving Antigua, the department said online betting on horse racing remains illegal under the 1961 Wire Act despite the existence of the more recently passed, and updated, Interstate Horseracing Act.
The department hasn't actively enforced its stance.
Like the racing industry, professional sports leagues also like the bill. They argue that Web wagering could hurt the integrity of their sports.
Sen. Jon Kyl, R-Ariz., is leading support for the ban in the Senate. The issue has not been debated in that chamber this year, and the measure hasn't been identified by Senate leaders as a top priority.
If the horse provision were stricken from the bill, there's a good chance the measure would run into objections from Senate Majority Whip Mitch McConnell, R-Ky., and others from racing states.