According to a report that was released this week by the Joint Committee on Taxation, a measure to decriminalize most forms of internet gambling would raise nearly $42 billion for the U.S. over the next decade. The report, from Washington Democratic Congressman Jim McDermott, is based on the provision of a federal license for operators that would allow them to offer online wagering throughout the United States.
A logical way to raise needed revenue
“I suspect that many of my colleagues will take more interest in this issue once they see $41 billion available that they can match up with any number of worthy programs,” McDermott said in a press release associated with the report. “I would suspect it’s only a matter of time before Congress appropriately moves to regulate the industry in order to protect consumers and reverse the flow of billions of dollars currently lost offshore as Americans gamble billions online despite attempts to prohibit the activity,” he added.
The report has also gained the attention of many in the online gaming industry. “This analysis further reinforces the fact that a regulated environment will generate billions in new revenue to offset the costs of health care reform or other vital government programs,” said Michael Waxman, spokesman for the Safe and Secure Internet Gambling Initiative. “With the completed analysis, and support for Internet gambling regulation growing daily, it’s only a matter of time before Congress acts and begins allocating the billions in new revenue sitting on the table to one program or another. This is a very significant development in support of the push to regulate the industry. We would expect that there will be more conversation and more interest in internet gambling regulations.”
The industry is hoping that the report will be a wake up call for the members of congress that haven’t been on board with the initiative. “We believe this tax revenue analysis will encourage immediate discussions and consideration of pending legislation to regulate Internet gambling,” said Waxman. “With everyone acknowledging that attempts to prohibit the activity have failed, this provides even more incentive for Congress to act.”
McDermott, Frank leading reform efforts
This past spring, McDermott introduced bill HR 2268. The Internet Gambling Regulation and Tax Enforcement Act would impose a fee of 2% of deposits on licensed internet gambling operators. McDermott is joined in the fight by Massachusetts Democratic Congressman Barney Frank. The chairman of the House Committee on Financial Services has announced his desire to hold a hearing and markup in the coming months on his legislation, the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R. 2267).
Chairman Frank’s bill would establish a framework to allow licensed gambling operators to accept bets from individuals in the U.S. It includes several consumer protections including safeguards against money laundering and identity theft. Additional provisions in the bill support the rights of each state to determine whether to allow web gambling activity for people within the state.
