Joint Committee on Taxation Predicts Billions in Poker Revenue
A recent study by the Joint Committee on Taxation estimates $42 billion in revenue could be generated over 10 years if online gambling were regulated and taxed as proposed by Jim McDermott (D-WA) and Barney Frank (D-MA).
Legislation was introduced in May by Rep. Frank to provide a legal framework for the legalization of online gambling in the United States. The bill, called the Internet Gambling Regulation, Consumer Protection, and Enforcement Act of 2009, has gained 60 co-sponsors. Many expect Frank to advance the legislation in the near future.
Various studies exist pointing to the huge revenue potential from taxing online gambling. A study by PricewaterhouseCoopers, the accounting firm, estimated $52 billion could be generated over 10 years of taxation.
Rep. McDermott has introduced a bill to tax online gambling operators. His bill proposes charging online gambling operators 2% on all deposits. Such legislation may gain traction in Congress as lawmakers look for new sources of revenue to pay for economic recovery and healthcare costs.
A new rule in congress requires all new spending to be paid for by spending cuts or new revenue. Politicians who have previously turned a cold shoulder to online gambling legalization may take a new look at the issue (and the $42 billion on the table). Rep. McDermott said, "I suspect that many of my colleagues, especially those on the fence, will take more interest in this issue once they see $41 billion available that they can match up with any number of worthy programs."
Expect to hear more about this issue in the future. When billions of dollars are at stake you can be sure that Uncle Sam will be around soon enough to collect.