Dec 6th 2007
According to a task revenue analysis asked by Representative Jim McDermott (D-WA) online gambling, that if it wouldn’t be banned, would generate between $3.1 billion to $15.2 billion in federal revenues over its first five years, and between $8.7 billion to $42.8 billion over its first ten years.

The numbers revealed are based on a detailed analysis made by an independent accounting firm. The results were announced in a testimony sent to the House Committee on the Judiciary where McDermott also presented in depth policy refinements to his legislation, the Internet Gambling Regulation and Tax Enforcement Act

"Even under the most conservative estimates, allowing online gambling and collecting the taxes will provide much-needed incomes to the U.S. Treasury� explained Jim McDermott. Currently this are sums of money we are giving to other jurisdictions with the only reason that some of my colleagues' think that if we place a ban on online gambling we can in reality stop people from gambling online. But in reality adults in US want to gamble online and they can do this and they will gamble online, so this is money we will continue to lose if we continue to ignore this evident fact.�

The Internet Gambling Regulation and Tax Enforcement Act have been developed to endow with better security against tax cheating and by this means enhance federal revenue from permitted Internet gambling action. The only new fee wished-for is a payment equal to 2% of player gambling deposits placed with a licensed gambling operator. These charges are paid by the gambling operator, not the individual player. These charges are intended to level the costs of operation in offering gambling services online as opposed to land based casinos offering gambling services in-person, and would only be applied to online gambling operators.

"Explicitly, these are not new taxes, but relatively taxes on the current gambling activity that is at the moment unregulated, unsupervised, and underground, because of a wrong belief that we can actually stop Internet gambling" said McDermott.

McDermott's legislation role is to create a licensing and enforcement structure for regulated Internet gambling in the U.S, coming as a companion bill to the Internet Gambling Regulation and Enforcement Act introduced by Representative Barney Frank (D-MA)

Based on a proviso in Frank's IGREA legislation that allows individual states and sports leagues to ban any Internet gambling action, the lower number of expected revenue from regulating Internet gambling reveals a situation in which sports leagues and most states opted-out of the system. An supplementary ballpark figure of $6.3 billion over five years and $17.6 billion in revenue over ten years is based on a supposition that the sports leagues opt-out completely and the states that authorize gambling activities in land based casinos would allow the same activities online.

Furthermore, legalizing Internet gambling could get to the bottom of a heated discussion around Internet gambling in the World Trade Organization that could force the U.S. to pay billions in trade compensation.
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