Internet Gambling Regulation and Tax Enforcement Act of 2008

Today Congressman Jim McDermott (D-WA) introduced the Internet Gambling Regulation and Tax Enforcement Act of 2008 that would ensure taxes are collected on regulated Internet gambling activities. This follows a string of victories for US residents who would like to gamble online and place bets on sporting events from the United States. Just a week ago another Congressman signed on to support Bill HR 2046. The legislation functions as a companion bill to the Internet Gambling Regulation and Enforcement Act that seeks to regulate internet gambling in the US.

The legislation strengthens provisions in an earlier version of the bill introduced last year, and includes an enhanced reporting mechanism under which licensed gambling operators are required to provide each customer an annual statement of winnings and losses. It also establishes a two percent licensing fee that is paid by the operator, not the individual gambler. The licensing fee is designed to equalize the costs of operation in providing gambling services online, as opposed to brick-and-mortar casinos providing gambling services in-person, and would only be applied to online operators. A large part of the lobbying effort to keep US residents from gambling online or placing sport wagers over the Internet has been driven by the US casino industry which this provision attempts to appease. “This is simply a framework to collect taxes on existing activity that is currently unregulated, unsupervised, and underground.”

“Before us is a tremendous opportunity to protect consumers and recoup billions of dollars that should be collected by the Internal Revenue Service,” said McDermott. “These are revenues that are desperately needed, given that we are at war and face difficulty financing the nation’s priorities.”

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