US Confirms Online Gambling Tax GainsBy: Rick Balding, Saturday October 31st 2009
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Legalization and taxation of the online gaming industry in America would yield significant taxation revenues. The online gaming industry has been saying this, the online gaming experts have been saying this and the online gaming industry associations have been saying this for more than a year now. However, for the first time an official agency of the United States government has come out in support of the above statement.
The United States agency that has reported this conclusion is the Joint Committee on Taxation. This committee consists of Congressmen from both parties and functions in a nonpartisan manner. According to the Wall Street Journal, which broke this news, the Joint Committee reviewed the scenario that would arise after lifting the ban on online gambling and overturning the UIGEA. In making its analysis the Joint Committee assumed that a small fee would be levied by the state on all deposits made by United States residents with online gambling companies. On the estimates of the total value of expected online gambling after legalization, the committee was able to conclude that the tax revenues thus generated over the next 10 years would be in the range of $41.8 billion.
It is too early to say what impact this report would have on the various moves that are being made to legalize and regulate online gambling in the United States. Spearheading the movement is the bill, popularly known as the anti-UIGEA bill, which has been introduced in the House by House Financial Services Chairman Congressman Barney Franks. Though this bill now has over 60 sponsors there is no certainty as to when it will come up for hearing because of the other pressing economic issues. A complementary bill to this one has been introduced by Democrat Representative Jim McDermott from Washington, which focuses on the taxation issues. McDermott has 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." Now it seems that there is officially realization of this point of view.
There has been another unexpected and unusual news item in connection with legalization of online gambling. Jason Chaffetz, a Republican Representative from Utah, said in an interview to the Desert News that the Congress could pass Barney Frank’s bill in this session itself. His view is that this move will be made in as much haste and secrecy as involved in the passing of the UIGEA. However, Frank is denying any such move and has gone on record stating that he would not sneak his bill through with a whole lot of other paraphernalia, preferring to allow it to stand alone.
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