On the heels of a US House Committee on Ways and Means hearing this morning regarding the feasibilities of taxing online gambling in the States, it seems only fitting to shed some light on the legislation that stands the greatest chance of being passed with this end in mind.

Called the Internet Gambling Regulation and Tax Enforcement Act, this bill currently sits as a companion bill to the more widely known IGREA bill (Internet Gambling Regulation and Consumer Protection Enforcement Act), penned and touted by House Financial Services Committee Chairman, Barney Frank of Massachusetts.

The taxation companion bill’s author, Democratic Representative, Jim McDermott of Washington State, has been steadily working hard on this piece of legislation, and announced just this year he would be reintroducing the bill with several revisions, the least of which includes tax measures to encourage online gambling operators to operate on a legal basis – “legal”, meaning according to standards imposed by reg-
ulatory laws yet to be voted on by the U.S. Congress.

Obviously, that is the least of concern for anyone who is in support of regulating online gambling. First and foremost, the IGREA must be passed in order to, in effect, overturn the vaguely worded Unlawful Internet Gambling Enforcement Act – the bill that goes into effect on June 1, 2010 and which seeks to ban most forms of online gambling, including online casinos.

McDermott’s most noteworthy revisions to his bill include a revenue incentive measure for gambling-friendly State government’s and Native American tribes. This would impart a 6% rev share on all deposits that flow through them, likely operating in similar effect to Kahnawake Gaming Commission (that is, of course, if the Kahnawake Gaming Commission actually answered to federal authorities). Another recently introduced provision includes to revenue set-asides, and would designate 25% of said revenue to directly help foster care children and 0.5% toward historic preservation of the arts.

When all is said and done, the one thing that online gambling regulation in the U.S. has going for it right now is a massive federal deficit and several State’s on the verge of bankruptcy. This is precisely where taxation policy can influence the prospects of regulating online gambling by means of generating an estimated $41 billion for the federal government in ten years time. The ball is now in the court of the House Committee on Ways and Means, where pro online gambling legislation could soon be ready for markup.

Tags: internet gambling regulation enforcement act, online gambling in us, online gambling laws, online gambling regulation, us online gambling

This entry was posted on Wednesday, May 19th, 2010 at 11:28 pm and is filed under News, Regulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.