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WASHINGTON, Nov. 19 /PRNewswire-USNewswire/ — A tax revenue analysis
announced by Representative Jim McDermott (D-WA) estimates that regulating
Internet gambling would generate between $3.1 billion to $15.2 billion in
federal revenues over its first five years, and between $8.7 billion to
$42.8 billion over its first ten years. The data, based on a detailed
analysis provided by an independent accounting firm, was provided in
testimony submitted to the House Committee on the Judiciary where McDermott
also detailed policy refinements to his legislation, the Internet Gambling
Regulation and Tax Enforcement Act.“Even under the most conservative estimates, licensing and regulating
Internet gambling – and collecting the taxes that are due – will provide
much-needed revenue to the U.S. Treasury,” said McDermott. “This is money
we are currently losing to other jurisdictions, for no other reason than
some of my colleagues’ think we can actually stop people from gambling
online. It is money we will continue to lose if we ignore the fact that if
grown adults in America want to gamble online, they can and they will.”The Internet Gambling Regulation and Tax Enforcement Act has been
refined to provide better protections against tax cheating and thereby
increase federal revenue from permissible Internet gambling activity. The
only new fee proposed is a payment equal to two percent of player deposits
placed with a licensed gambling operator – fees paid by the operator, not
the individual gambler. The two percent deposit fee is designed to equalize
the costs of operation in providing gambling services online as opposed to
brick and mortar casinos providing gambling services in-person, and would
only be applied to online operators.“To be clear, most of the revenues generated would come from taxes
required under existing law that we currently lose because of a misguided
belief that we can actually stop Internet gambling,” said McDermott.
“Specifically, these are not new taxes, but rather taxes on existing
activity that is currently unregulated, unsupervised, and underground.”McDermott’s legislation functions as a companion bill to the Internet
Gambling Regulation and Enforcement Act, legislation introduced by
Representative Barney Frank (D-MA) which would establish a licensing and
enforcement framework for regulated Internet gambling in the U.S.Based on a provision in Frank’s legislation that permits individual
states and sports leagues to prohibit any Internet gambling, the lower
figure of projected revenue from regulating Internet gambling reflects a
situation in which sports leagues and most states opted-out of the system.
An additional estimate of $6.3 billion over five years and $17.6 billion in
revenue over ten years is based on an assumption that the sports leagues
opt-out entirely and the states that permit gambling activities in brick
and mortar casinos world permit the same activities online.“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. Moreover, regulating Internet gambling could resolve a dispute
around Internet gambling in the World Trade Organization that could force
the U.S. to pay billions in trade compensation.”To read McDermott’s testimony, please visit:
http://www.safeandsecureig.org/media/mcdermotttestimony.pdf
