With Congressman Barney Frank's HR 2267 due for mark-up in the House Financial Services Committee today, an editorial in the Washington Times is particularly relevant as it discusses the implications of this attempt to legalise online gambling in the United States and overturn the controversial UIGEA.
The well-informed editorial discusses the motivation for the bill and the impact of the UIGEA which, the piece observes, discarded "...the principle that had, until then, left the Internet largely free of discriminatory taxes and government regulation. That statute's draconian enforcement provisions would force financial institutions and credit-card companies to scrutinize every Internet transaction - even those taking place across international boundaries - so that "unlawful" wagers could be blocked."
The Times discusses the complexity and imperfections in the UIGEA that have largely rendered it ineffective, and comments that Congressman Frank wants to jettison those rules before they are (practically) implemented.
The editorial refers to independent and expert estimates that Representative Jim McDermott's companion taxation bill, which sets a 6% tax rate on internet gambling deposits, could generate up to $42 billion in federal tax revenues over a decade for distribution to states and Indian tribes that opt into the licensing system established by Frank's bill.
42 states in the Union offer lottery action, generating $25 billion a year, and 28 states permit the operation of Indian casinos that haul in an additional $27 billion in revenue, the editorial remarks. A dozen states allow Las Vegas and Atlantic City-style casinos that hand over $5.7 billion in taxes to state bureaucracies each year, according to Congress' Joint Committee on Taxation.
"Government-sanctioned gambling is big business, generating an annual profit of $92 billion," the editorial comments. "Protecting this cash cow from upstart online competitors was the priority for the (land) industry lobbyists who succeeded in enacting the Internet gambling ban four years ago.
"Mr. Frank's proposal represents a far less burdensome and intrusive regime than existing law. Passage of his legalization measure without Mr. McDermott's companion tax measure would be ideal, but it's unlikely," the piece concludes, opining that government overspending necessitates additional revenues.
Source: InfoPowa News