Attention all gamblers. Uncle Sam thinks you could help him cover some of his operational costs.
The House Financial Services Committee yesterday approved a bill that would effectively legalize some types of online betting.
But bettors shouldn't get too excited. The bill is specifically limited to online poker and other nonsports betting.
And remember, it would also make it easier for the IRS to get its cut of your winnings.
Supporters of the legislation say that could mean as much as $42 billion in additional federal tax revenue over 10 years.
The panel's vote to approve H.R. 2267, the Internet
Gambling Regulation, Consumer Protection, and Enforcement Act of 2009,
would give the Treasury Department authority to issue licenses to and regulate Internet gambling operators.It's the first official counter-measure to 2006's Unlawful Internet
Gambling Enforcement Act (UIGEA), which restricted the use of payment options for Americans who gamble online.
A matter of individual financial freedom: Rep. Barney Frank (D-Mass.), chair of the Financial Services Committee and sponsor of the bill, characterized the measure as an effort to protect the freedom of
adults to spend their money as they see fit, while providing appropriate
"The bill, which licenses and regulated online gambling, requires licensees to take appropriate safeguards to prevent fraud, money laundering, underage and compulsive gambling," said Frank in an announcement following the Committee's action.
The measure, which was opposed by several states as well as tribal gaming operators, was amended, noted Frank, to clarify the bill's effect on Indian tribes and to require consultation with tribes in the measure's implementation. There also is an exception for intrastate and intratribal online lotteries.
Limits remain: As for possible gambling by young people and compulsive gamblers, Frank said the bill contains "additional, strong protections to prevent minors from gambling online; prevents inappropriate online advertising targeted toward underage or compulsive gamblers; prohibits licensees from accepting bets or wagers from persons on the self excluded list of compulsive gamblers and persons delinquent with child support payments; [and] requires that players set financial loss limits."
And while the bill was seen as a slap at UIGEA, it also prevents the use of a credit card to gamble
A turning of a corner? The committee vote was 41 to 22, with seven Republicans joining most Democrats in favor of the measure.
However, given the lateness of this Congressional session and the amount of other issues that must be addressed by year's end, further action this year on the bill is unclear.
Still, the approval is an indication as to what heretofore unacceptable lengths Congress is willing to go in an effort to raise money without raising individual taxes.
"I was looking for the money," Rep. Jim McDermott (D-Wash.) said in an interview with the New York Times. McDermott also has sponsored a companion bill to allow taxation of Internet gambling, with money raised there dedicated to education efforts.
Rep. Brad Sherman (D-Calif.) is thinking along the same lines, noting that "$42 billion over 10 years has an effect." Sherman told the newspaper, "We will not pass an Internet gaming bill. We will pass a bill to do something very important, funded by Internet gaming."
We'll see if such hair-splitting will work within the full House where there's still substantial opposition to all sorts of gambling, regardless of how much money it could provide.
- Bet on it, gambling winnings are taxable
- Online gambling restrictions in effect
- Online gambling on its way back to U.S.?
- Kentucky Derby bettor, IRS big winners
- Delaware preparing to take sports bets
- Federal court halts Delaware betting plan
- Taking a chance
- Super Bowl bets mean IRS losses
- Tax office workers win lottery millions
- Internet betting gets another advocate
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