Lawmakers push to regulate, tax online gambling

May 19, 2010 By KEVIN FREKING , Associated Press Writer

(AP) -- Prohibition didn't work with alcohol and it's not working with Internet gambling now, say lawmakers pushing Congress to approve long-shot legislation that would legalize and tax online wagering.

Rep. Jim McDermott, D-Wash., told his colleagues during a congressional hearing Wednesday that millions of Americans gamble on the Internet each day, despite laws to prevent it. Citing industry analysts, McDermott said they wager nearly $100 billion annually, generating an estimated $5 billion for offshore operators.

He said the money would be put to better use in the U.S. and would create thousands of jobs for people who would be employed by licensed gambling sites.

"Regulation and taxation have proven to be a better policy for our country when it comes to alcohol," McDermott said. "The same is true for online gambling."

Realistically, supporters realize that Congress is highly unlikely to pass legislation this year on the subject, but they hope to lay the groundwork for the future with hearings like the one that took place Wednesday before the House Ways and Means Committee.

While McDermott's bill would provide for taxing Internet gambling, companion legislation from Rep. Barney Frank, D-Mass., would license and regulate the industry. The Treasury Department would be tasked with licensing operators that meet financial requirements and pass criminal background checks.

Frank's legislation prohibits the operators from accepting sports bets as well as bets initiated in states or tribal lands that prohibit that particular type of Internet gambling. It has drawn support from online poker players.

The House voted overwhelmingly four years ago to ban financial institutions from handling transactions made to and from Internet gambling sites. The ban is set to begin June 1.

Opponents of the proposed legislation called the hearing a waste of time.

"It's pretty clear to me that Congress is not about to legalize, let alone legalize and tax Internet gambling," said Rep. Wally Herger, R-Calif. "There are far more pressing issues we should be focused on."

Rep. Bob Goodlatte, R-Va., told lawmakers that almost all the nation's attorneys general have opposed similar legislation in the past. He referred to a constituent whose son committed suicide after generating enormous debts from Internet gambling.

"Unfortunately, financial ruin and tragedy are not uncommon among online bettors," Goodlatte said.

Democratic Rep. Shelley Berkley, whose congressional district includes Las Vegas, said online betting has never been more popular, despite efforts to stop it. She said she supports efforts to legalize it, which would allow Nevada casinos to participate in the online market, but she can't support the taxes McDermott proposed.

"Participation in the Internet gambling market by reputable U.S. companies will ensure that U.S. players are able to choose operators based on their integrity and security, and not just their availability," Berkley said.

Explore further: IBM dips into Twitter stream for business insights

1 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Gambling industry pushes efforts to legalize online betting

May 13, 2009

Backed by a powerful House member, the online gambling industry is waging a campaign in Congress to legalize Internet betting, saying it will continue regardless of its legal status and can be regulated and taxed if not outlawed. ...

Government delays new ban on Internet gambling

Nov 27, 2009

(AP) -- The Treasury Department and the Federal Reserve are giving U.S. financial institutions an additional six months to comply with regulations designed to ban Internet gambling.

Gambling bill moves to full House

May 26, 2006

In a 25-11 vote Thursday the House Judiciary Committee passed a bill banning gambling over state lines and Internet technologies.

House effort would legalize, tax online gambling

Apr 26, 2010

Americans looking to satisfy their gambling itch can do so now at the close to 1,700 casinos across the country. A bill in the House of Representatives could bring casino gambling to the approximately 86.8 million American ...

Recommended for you

HTML5 reaches 'Recommendation' status

21 hours ago

W3C stands for World Wide Web Consortium, and the W3C HTML Working Group is responsible for this specification's progress. As the title suggests, they have a far-reaching job of watching out for the progress ...

Online dating service admits to fake profiles

23 hours ago

A British-based online dating service admitted to US regulators Wednesday that it created fake, computer-generated profiles to lure users into upgraded memberships.

NY voters to decide on digital legislation

Oct 28, 2014

If New York voters approve proposition No. 2 on the ballot next week, their 213 legislators will join the digital age. Their desks in the ornate chambers of the Capitol will have computers instead of thick stacks of bills ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Tan0r5
not rated yet May 19, 2010
Prohibition is also not working with preventing drug abuse or prostitution.
A reputable U.S. company won't prevent abuse. U.S. companies are in business to make money not morality. The U.S. Congress is supported by its lobbyists. Once Congress allows the IRS and the States to start taxing the Internet they won't stop.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.