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HEAVYWEIGHT NAMES IN ONLINE GAMBLING TAX HEARING

5/19/10 - Today’s (Wednesday) hearing on Representative Jim McDermott’s proposal to tax a legalised online gambling industry in the United States (see previous InfoPowa reports) has attracted some heavyweight political and other names
 
The House Ways and Means Committee has published a witness list that includes both pro and anti Internet gambling personalities like Congressman Barney Frank and Representative Bob Goodlatte, along with civil service representatives from the United States Treasury and Internal Revenue Service.
 
Christopher Wagner, Commissioner of the Small Business Self-Employed Division will represent the interests of the IRS, whilst Rebecca Sparkman, Deputy Director for Operations for the Criminal Investigation Division is also listed.
 
Charles Steele, Deputy Director of the Financial Crimes Enforcement Network for the United States Department of the Treasury will speak for the US Treasury.
 
Jim McDermott, as author of HR 4976, the Internet Gambling Regulation and Tax Enforcement Act, will be a key figure. His proposal deals with a wide range of taxation issues and is complementary to Barney Frank’s HR 2267, which is designed to legalise and regulate US gambling on a federal level. 
 
Frank’s bi-partisan bill has just signed it’s 69th political sponsor on Capitol Hill in Representative Scott Murphy, a New York Democrat.
 
McDermott is seeking to impose taxes on online poker and other Internet gambling that could bring the federal government as much as $42 billion over 10 years, according to a congressional analysis. States may collect as much as $30 billion, McDermott’s office estimates.
 
“It’s a human activity that people are going to do, and it’s a good place to pick up some dough,” said McDermott, a Washington Democrat, in an interview. “I’ve gotten a thousand ideas pumped at me about what we should do with the money.”
 
McDermott’s proposal would require Internet gambling operators to pay a 2 percent tax to the federal government on betting deposits and a 6 percent tax to states. The federal treasury also would collect taxes on gaming-company profits, and bettors would pay taxes on winnings.
 
However, arch anti-online gambling opponent, Republican representative Spencer Bachus, says revenue estimates for McDermott’s proposal are bloated because they assume all states would participate. The Alabama congressman said he’s concerned the prospect of more government revenue will attract lawmakers who thus far have opposed legalising Internet gambling.
 
“I know the government is in a search for money, but if you have something that is destructive to society, you shouldn’t let $40 billion be the price tag,” Bachus said.
 
 The U.S. offshore Internet gambling market is expected to climb to $5.7 billion in 2010 from $5.4 billion last year, according to U.K.-based H2 Gambling Capital, which supplies data on the industry. The global market is about $30 billion.
 
26 Democrats and 18 Republicans make up the powerful House Ways and Means Committee, which includes familiar names associated with internet gambling like Nevada representative Shelley Berkley.



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