What's Next For The US Online Gambling Industry?July 30, 2010 7:53 am
Following Wednesday’s passing of Rep. Barney Frank’s online gambling bill by the ‘House Committee on Financial Services,’ the question is what happens next in the drive to legalize the online gaming market in the United States.
Frank’s ‘Internet Gambling Regulation, Consumer Protection and Enforcement Act,’ effectively seeks to overturn the 2006 UIGEA bill, and pave the way for the Treasury Department to regulate and licence all non-sports related online gaming activities.
Now, its companion bill introduced by Rep. Jim McDermott and dealing with tax considerations for the US Internal Revenue Service is likely to receive a hearing in the Ways & Means Committee, after September.
The crux of McDermott’s ‘Internet gambling tax bill,’ will be to place an 8% tax on all internet gaming businesses, with the federal government receiving a 2% share and 6% going to the local states or tribes. In addition, gambler’s winnings would also be subject to taxes.
Crucially, the US government would then be able to benefit from an estimated $42 billion in tax revenues collected over a ten year period that would be derived from a regulated Internet gambling industry.
Once the ‘Internet gambling tax bill’ is passed, the two bills would then find themselves in front of the full House as part of a comprehensive Internet gambling package.
However, in the meantime Democrat Robert Menendez has a bill dealing with the issue of online gambling and that of games of skill. Menendez’s bill is due in front of the U.S. Senate and would still have to be reconciled with the other package before full approval.
Meanwhile, with mid-term elections due and President Obama not coming out on either side of the online gambling debate, an end of the current Congress could possibly annul much of the gains achieved thus far.
As we can see much has to be done before legalization of the US online gambling market becomes a reality, but at least Congress seems to be more receptive now to seriously considering the potential revenue derived from taking such a bold move.