Jim McDermott’s Internet Gambling Act Hearing

Internet Gambling and Tax Enforcement Act of 2010, seeking to tax and regulate online casinos instead of banning them was heard in the House Ways and Means Committee as planned, on the 19th of May. The bill, which is known in the Congress as HR 4976, was proposed by Representative Jim McDermott in support of Congressman Barney Frank’s HR 2267 that is scheduled to be heard by the House Financial Services Committee in a little more than a month, on July 2010.
Barney Frank pointed out that a democratic country should allow every mature citizen make his or her own choice whether to gamble or not, no matter online or at regular land casinos. As the Unlawful Internet Gambling Enforcement Act will take effect on the 1st of June, a number of protests are sure to follow. Not only average residents of the US that like to spend their free time gambling online, but the very banks that will have to monitor internet gambling from the beginning of summer 2010 are likely to oppose the UIGEA. Even one of its most ardent advocates, Representative Earl Blumenauer who voted for the UIGEA four years ago, became one of the 70 co-sponsors of Barney Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267).
The hearing of Internet Gambling and Tax Enforcement Act (HR 4976) aroused much discussion. Its sponsor, Representative Jim McDermott, mentioned that banning is not an option in a free democratic country like the USA. The government might hold online gambling illegal, but the US players would still visit internet casinos belonging to offshore companies, thus depriving the country of more than $5 billion annually. McDermott compared the current situation with the dry law of the beginning of the XX century, when alcohol was still bought and sold in spite of the ban, leading to increased corruption of officials and the flourishing of mafia and black market. The details of possible tax income were discussed, as well as the money distribution between the government and the states.
The Executive Director of PPA (the Poker Players Alliance), John Pappas said that the possible huge tax revenue from online casinos is not the only reason to make internet gambling legal. Customer protection is even more important, because when online gambling is made illegal, those who still enjoy it can never feel secure and protected. On the other hand, the taxation proposed by Jim McDermott will not hinder the players, as the gambling taxes will be paid by online casino operators, while all the current income taxes will still affect any winnings, just like with the state-run lotteries. Besides losing billions of dollars to offshore companies, the government fails to provide its citizens with thousands of working places that could be available if online gambling was legal.