As Congress considers how to pay for health care reform and other critical programs, a Joint Committee on Taxation analysis released today by Rep. Jim McDermott (D-WA) found that regulating Internet gambling, as proposed in pending legislation introduced by Representatives Barney Frank (D-MA) and Jim McDermott (D-WA), would generate nearly $42 billion over 10 years. The analysis is based on the provision of a federal license for operators that would allow them to offer online gambling throughout the United States, while maintaining existing federal prohibitions on any form of sports betting.
The opportunity to generate billions in new revenue is especially significant because of a congressional rule that any piece of legislation must either be budget neutral or offset with identified savings.
House Committee on Financial Services Chairman Frank has announced his intent to hold a hearing and markup in the coming months on his legislation, the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R. 2267). Since its introduction in May, a bipartisan group of more than 60 co-sponsors has signed onto the bill.
Chairman Frank’s legislation would establish a framework to permit licensed gambling operators to accept wagers from individuals in the U.S. It mandates a number of significant consumer protections including safeguards against compulsive and underage gambling, money laundering, fraud and identity theft. Additional provisions in the legislation reinforce the rights of each state to determine whether to allow Internet gambling activity for people accessing the Internet within the state and to apply other restrictions on the activity as determined necessary.
Rep. McDermott’s companion bill, the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), would raise revenue for the U.S. Treasury primarily through ensuring that applicable individual and corporate taxes and license fees on regulated Internet gambling activities are collected. Currently, this revenue remains uncollected while millions of Americans wager online more than $100 billion annually without consumer protections.
