Online Gambling Taxation Bill Hearing Took Place Today

May 19, 2010 | News Category: Gaming Law

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Today was an important day for online casino players in the United States, with a hearing in the House Ways and Means Committee regarding taxation of online gambling.

Representative Sander Levin, the chair of the House Ways and Means Committee opened the session saying, "The issue of whether Internet gambling should be legal is not the subject of this hearing." It was important for Representative Levin to remind all in attendance that the hearing was meant to focus on taxation, and the implications of taxation of the online gambling industry should it be legalized. Representative Levin continued: "We meet today to explore the tax implications of the proposal to legalize Internet gambling."

He further explained that the hearing was particularly important because it is important that the scope of the industry, as well as the potential taxation benefits should be understood.

Although the hearing began with the reminder by Levin that it was specifically and solely about the taxation issues that are connected with online gambling, there were opinions voiced as to whether the online gambling industry should be regulated or not.

Representative Jim McDermott explained that prohibition has not worked in preventing Americans from gambling online. He further explained that it has simply put American consumers at risk because the online casinos are based offshore, and are therefore not regulated by American law. He also explained that the revenue from Americans gambling online was simply sending "billions of dollars in revenue to other nations."

Representative McDermott has estimated that income from the regulation of online gambling could bring in a possible $72 billion to the United States over a 10 year period. His estimate was based on a report from the Congressional Joint Committee on Taxation. He further broke down the numbers estimating that of the $72 billion, around $42 billion of the revenue would go to the federal government, and about $20 billion would go to the state governments.

There were the usual voices for and against online gambling legislation, with strong opinions being voiced from those opposing the legislation, notably Representative Bob Goodlatte, and from those who support online gambling legislation, such as Representatives Barney Frank and Jim McDermott.

Since the hearing today was only for informational purposes, there was no vote taken regarding the various positions that were voiced, as well as no mark-up of the bill.

Representative Frank , who was invited as a guest to the hearing, since he is not a member of the House Ways and Means Committee, but of the House Financial Services Committee, said that a vote on his bill would take place in his committee in July.