US Congressman Jim McDermott introduced March 5 the Internet Gambling Regulation and Tax Enforcement Act of 2008 that would ensure that taxes are collected on regulated Internet gambling activities. According to a tax revenue analysis by PricewaterhouseCoopers the revenues are estimated between us$ 8.7 billion and us$ 42.8 billion over ten years.
McDermott comments in a letter addressed last year to all Congress members that those are not mostly new taxes—the bulk of the revenues generated would come from taxes required under existing law.
The edited legislation includes an enhanced reporting mechanism under which licensed gambling operators are required to provide each customer an annual statement of winnings and losses. It also establishes a two percent licensing fee (paid by the operator) which is designed to equalize the costs of operation in providing gambling services online, as opposed to landbased casinos providing gambling services in-person, and would only be applied to online operators. McDermott sees it as a tremendous opportunity to protect consumers and recoup billions of dollars that should be collected by the Internal Revenue Service.
The legislation would also reinforce the rights of the states to control what level of Internet gambling is permissible within their borders, including the ability to apply additional taxes, and to ensure that appropriate consumer protections and limitations were in place.
Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative, says by not regulating and taxing Internet gambling, the United States is forfeiting billions of dollars in revenue needed for critical government programs.
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