Joint Committee on Taxation Review Online Gambling

November 04, 2009 | News Category: Gaming Law

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It has been discussed, reported on, and made obvious by many in the online gambling sector, and by supporters of online gambling, that legalization and taxation of online casinos would bring very large, significant, and much needed revenues to the United States authorities. Many have pointed out that the revenue brought in from taxing online casinos could be used to substantially subsidize the very important health programs that the government are working towards.

However, for the first time, an official agency of the government of the United States has come out with a report regarding these issues, and in support of what the online gaming industry has been suggesting for more than a year now.

The news regarding a study by the Joint Committee of Taxation was broken by the Wall Street Journal. The Joint Committee on Taxation consists of Congressman from across the board. Both Republicans and Democrats make up the Joint Committee on Taxation, which functions in a nonpartisan manner. The Wall Street Journal explained that the Joint Committee reviewed the hypothetical scenario of what would happen if the online gambling ban was lifted and the Unlawful Internet Gambling Enforcement Act (UIGEA) was overturned. Estimates were made as to how much the tax revenues would amount to, based on the general taxation of online casinos, including a small fee, or levy, on all deposits made by US residents, which would be paid to the state.

After in-depth research, the Joint Committee of Taxation estimated that the total amount of expected online gambling taxation revenues, which could be expected after legalization and regulation of online casinos in the US, would be around $41.8 billion over a time-period of ten years.

Although this does look like a positive step towards Congress passing Barney Frank and Jim McDermott’s online gambling bills, one never knows what might result from a report of this nature. Barney Frank and Jim McDermott have been pushing their bills, and working towards dismantling the rather unclear UIGEA.

McDermott’s bill focuses more on the taxation issues surrounding online casinos. He said "I’m always looking for money to deal with some of the problems I see out there. This looked like a good place to find some revenue."

Perhaps the Joint Committee of Taxation’s report will help solve different issues for a number of US residents. First, and foremost, health care funding can be increased, and secondly, online gamblers can play in a more safe and hassle-free environment.