Representative McDermott (D.-Wash.) said he had updated his poker tax bill because a new tax would specifically benefit state and tribal governments if Congress passed legislation to explicitly legalize and regulate online poker. The bill is designed to serve as a companion bill to Representative Barney Frank’s bill that would regulate the industry.
Online gambling advocates applauded it as a significant step in the battle to regulate online poker in the United States. The Safe and Secure Internet Gambling Initiative’s Michael Waxman said the legislation is win-win for federal and state leaders, giving an opportunity to regulate a currently offshore and underground industry, protect consumers and put to good use tens of billions of dollars in otherwise lost revenue.
Representative McDermott’s bill is the Internet Gambling Regulation and Tax Enforcement Act (HR 4976) and calls for a 6% tax on deposits that would directly benefit state and tribal governments. As with his previous poker bill, there will also be a 2% federal tax, of which a quarter will be allotted to foster-care programs. “I have always watched them (foster kids) get the short end of the stick,” he said.
The bill is estimated to raise about $30 billion for states and tribes in the next 10 years. The Congressional Joint Committee on Taxation says that along with other taxes and federal licensing fees, online poker regulation should net $42 billion in federal revenue over 10 years.
Representative Frank (D.-Mass.) showed his support for the McDermott legislation by immediately signing on as a co-sponsor. Representatives Earl Blumenauer (D.-Ore.) and John Larson (D.-Conn.) also did so.
“Given the many critical government programs currently going under-funded or not funded at all, internet gambling regulation should be given fair and immediate consideration,” Representative McDermott said when he introduced his first poker-related piece of legislation of the session in October.
“Prohibition in various guises has failed before and is failing once again. There is a better way.”
06 April, 2010