New tax estimates prepared by international professional services group
The United States could benefit to the tune of between $8.7 billion and $42.8 billion in federal tax revenues over the first ten years of a regulation and licensing approach rather than one of prohibition, says a new study carried out by the independent business services group PricewaterhouseCoopers.
The findings of the analysis were provided to all members of Congress by Representative Jim McDermott (D-WA earlier this week in support of his proposal to license, tax and regulate US online gambling along the lines suggested by Congressman Barney Frank.
Urging his fellow Congressman to support Internet gambling regulation rather than prohibition, Representative McDermott said this week: "Before us is a tremendous opportunity to protect consumers and recoup billions of dollars that should be collected by the Internal Revenue Service. These are revenues that are desperately needed, given that we are at war and face difficulty financing the nation's priorities."
McDermott introduced the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2607), which seeks to tax regulated Internet gambling.
"To be clear, these are not mostly new taxes - the bulk of the revenues generated would come from taxes required under existing law," said McDermott. "This is simply a framework to collect taxes on existing activity that is currently unregulated, unsupervised, and underground."
The current US government approach, prohibiting Internet gambling through the Unlawful Internet Gambling Enforcement Act (UIGEA), has proved to be a failure, McDermott claimed.
Notwithstanding the UIGEA prohibition, millions of Americans are still able to gamble online. In addition, proposed rules by the Treasury Department to implement the current prohibitions have been severely criticised by many parties, including the American Bankers Association, Credit Union National Association, Financial Services Roundtable, and other leading financial services companies and groups.
"Instead of this ineffective attempt to prevent adults from gambling over the Internet, we need a more sensible approach to protect consumers and ensure that revenues that now flow offshore stay here in the U.S. and are therefore subject to taxation," added McDermott. "A new, safer, more sensible approach is needed to regulate Internet gambling and protect consumers."
McDermott's legislation functions as a companion bill to the Internet Gambling Regulation and Enforcement Act (H.R. 2046), legislation introduced by Congressman Barney Frank (D-MA) which would establish a licensing and enforcement framework for regulated Internet gambling in the U.S. The legislation would allow States to retain full control over the regulation of Internet gambling within their borders, applying additional taxes, protections and limitations as determined necessary and appropriate.