McDermott Bill to Tax Online Gambling Would Raise Billions

"It seems amazing that the government can accept the loss of American jobs to outsourcing as a price that must be paid for free trade, but online gambling is more than it can stomach."

Perhaps American citizens will get lucky this time, and rather than the federal government pursuing an exorbitantly expensive policy doomed to failure like the war on drugs, the war on online gambling will be tossed aside and replaced with laws allowing for taxation and regulation of internet wagering.

Representative Jim McDermott, a Democrat from Washington, has introduced a bill to tax online gambling and establish regulations regarding the conduct of online casinos and gambling sites. McDermott is prepared to accept the reality that online play is a reality which cannot be legislated out of existence, as Congress has myopically tried to do in recent years.

Further, using financial analysis done by PriceWaterhouse, McDermott has found that proper taxation and control of online gambling, rather than the outlawing of the industry, would result in a revenue windfall for the United States in the range of anywhere from $8.2 billion to a whopping $42.8 billion over the next ten years. As the Representative points out, to ignore such a source of income while the nation is at war and facing hard economic times would be nearly criminal.

The government has previously tried to shut down the online betting business via the Unlawful Internet Gambling Enforcement Act, preventing the transfer of moneys from banks and credit card companies to online gambling sites. The law has not stopped millions of citizens from finding new ways to fund their wagers, and has caused protests and anger by the businesses affected, including the American Bankers Association and the Credit Union National Association.

The U.S. stance has also caused trouble overseas, as eight different countries have pursued a legal remedy for violations of free trade agreements the U.S. had signed. It seems amazing that the government can accept the loss of American jobs to outsourcing as a price that must be paid for free trade, but online gambling is more than it can stomach.

McDermott's bill is seen as a companion to Representative Barney Frank's bill, the Internet Gambling Regulation and Enforcement Act. This bill would allow each state to tax and limit online play as necessary. Together the bills offer a ray of hope that Congress may face reality and deal with it in a practical and efficient manner.