Online Poker

Online Poker Debate Heats Up on Capitol Hill

by Poker Team

With the June 1st deadline for UIGEA compliance looming for the financial services industry, the debate really heated up on Capitol Hill yesterday during a two and a half hour meeting with the main topic being the question of whether or not to legalize and tax internet gambling. The setting was the House Ways and Means Committee and the heavy hitters from both sides of the debate took part. For the pro-taxation side, Rep. Barney Frank of Massachusetts and Rep. Jim McDermott of Washington were set to debate opponents such as one of the chief UIGEA architects, Rep. Bob Goodlatte. In a funny bit, it was reported that on several occasions, Goodlatte referred to the original legislation as Uniform Internet Gambling Enforcement Act, which is ironic that he would get its name wrong.

Frank made some of the first remarks of the hearing as he unfortunately had to depart early due to a scheduling conflict. Among his opening remarks were

“We do know that gambling will go on in America. The question is should we continue to give those who gamble the complete immunity from taxation. We talk about avoiding teacher layoffs and this would be a way to do that.”

His counterpart McDermott continued citing the issue of prohibition last century,

“Regulating internet gambling would create jobs. An April 2010 study found that it would mean 32,000 additional jobs. Regulation and taxation has proven to be a better policy for our country when it comes to alcohol and the same will be true for online gambling.”

Though McDermott raised an excellent point, opponents were not going to be easily swayed by the argument. In particular, Goodlatte argued that Federal regulation of gambling is directly in opposition to his belief that the decision should lie by the individual states. He continued by trying to debunk the revenue forecasts presented by Barney’s groups implying that those figures would be swayed with the assumption that all states would fall into compliance. Goodlatte also pointed out that many influential organizations that legalized internet gambling would effect have gone on record their opposition. Among them are the NFL and MLB who raised concerns as to how widespread gambling could impact their products.

Among the topics debated was whether it was more practical to tax players at the time they make deposits or to tax their winnings. This particular issue is one that is far from being resolved as it becomes more difficult in estimating how much revenue would be gleaned from a deposit tax, whereas estimating tournament winnings would be much easier.

It is unclear whether this will be picked up again this week, but you can be sure that there will be more debate around internet gambling legislation as June 1st quickly approaches.

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