Earlier in the week, Congressman Jim McDermott (D-WA) provided Congress with his findings in his tax revenue analysis. McDermott’s analysis suggests that the U.S. Government could generate between $8.7 billion and $42.8 billion from regulating Internet gambling from U.S. residents within the first ten years. McDermott’s findings were prepared by PricewaterhouseCoopers. In hopes of bringing change to our current set of laws, McDermott was sure to provide a copy of his analysis to all Members of Congress.
“Before us is a tremendous opportunity to protect consumers and recoup billions of dollars that should be collected by the Internal Revenue Service,” said Representative McDermott. “These are revenues that are desperately needed, given that we are at war and face difficulty financing the nation’s priorities.”
Along with the analysis, he introduced the Internet Gambling Regulation and Tax Enforcement Act, which would tax regulated Internet gambling. Most of these taxes are not new, and the bulk of the revenue would be drawn from taxes under our current laws. McDermott would like this to be used as a framework to collect taxes from currently unregulated, unsupervised and underground Internet gambling activities. It would be naïve, not to recognize that Internet gambling is still occurring within the United States, and capitalizing on this activity is beginning to look more appetizing, if not necessary for our law makers.
It has become increasingly clear, that the current approach to prohibit online gambling is a failure. Despite their attempts to outlaw the activity, millions of Americans are still able to gamble online through various loopholes. Aside from the consumers themselves (online gamblers), many third parties are severely criticizing the new legislation as well. The American Bankers Association, Credit Union National Association, Financial Services Roundtable, and other leading financial service companies are among the many opposed to such unjust legislation.
“Instead of this ineffective attempt to prevent adults from gambling over the Internet, we need a more sensible approach to protect consumers and ensure that revenues that now flow offshore stay here in the U.S. and are therefore subject to taxation,” added McDermott. “A new, safer, more sensible approach is needed to regulate Internet gambling and protect consumers.”
McDermott’s proposed legislation would function as a companion bill to the Internet Gambling Regulation and Enforcement Act which was introduced by Representative Barney Frank. The IGREA coupled with this proposed bill would allow for a licensing and enforcement framework for Internet gambling within the United States. This framework would additionally allow for States to retain full control over their own regulations on Internet gambling within their own borders.
“By prohibiting a popular, recreational activity that many millions enjoy in the comfort of their own homes, the U.S. is forfeiting billions of dollars in revenue needed for critical government programs,” said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. “It is time for Congress to regulate and tax Internet gambling to ensure security controls are in place to protect consumers and capture billions in revenue.”
In a society driven by money, this may be precisely what is needed to legalize Internet gambling in the United States. If this is enough to turn the tables on the current legislation, millions of Americans will be pleased along with the many countries who have suffered the blow from the loss of the U.S. market from their profits. In my opinion it’s a sad fact that it comes down to money as opposed to the rights of U.S. citizens, though. Not to mention the fact that one of the reasons for enforcing the newly proposed legislation would be to “protect American consumers.” Had protecting American consumers been on their minds in the first place such laws would never have been enforced!
Only time will reveal the uncertain fate of Internet gambling in the United States.