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16 July
2008 Congress Moves
To Dedicate $40 Billion Internet Gambling
Revenue Rep. Jim
McDermott (D-Wash.) has introduced legislation that
directs a potential $40 billion over the next 10
years to be spent on job training for those in the
declining sectors of the economy and educational
assistance for foster care youth. The legislation,
Investing in our Human Resources Act of 2008 (H.R.
6501), would be funded through new revenue
generated by regulated internet gambling
activities. "We have an ideal
opportunity to invest billions of dollars in
American workers and our struggling economy without
increasing the federal deficit," said Rep.
McDermott in speaking about the Investing in our
Human Resources Act (IHRA). "IHRA would utilise a
funding stream that would become available should
Congress decide to legalise and regulate internet
gambling, which would protect consumers and collect
tax revenue that is currently offshore."A provision
in the legislation also encourages responsible
internet gambling behavior and an awareness of
unsafe practices, something which has been praised
by problem gambling advocates. "I believe that
the McDermott bill could be a positive step to help
raise awareness about the dangers of unsafe
gambling practices and the availability of
addiction treatment," stated the Executive Director
of the National Council on Problem Gambling Keith
Whyte. In a sign that
the legislation has support from key members of the
Democratic Congressional leadership, Reps. George
Miller (D-Calif.) and John B. Larson (D-Conn.) are
original co-sponsors of the legislation. Rep.
Miller is a member of the Democratic Leadership and
chairman of the House Democratic Policy Committee.
Rep. Larson serves as vice chair of the Democratic
Caucus and assists in organising and running the
Democratic Caucus. Introduction of
IHRA demonstrates the growing support in Congress
to regulate internet gambling. "It is
encouraging that Congress is seeking to regulate
internet gambling and put the billions in new
revenue to good use," said Jeffrey Sandman,
spokesman for the Safe and Secure internet Gambling
Initiative. "We need to change the current path,
where the prohibition of internet gambling allows
for billions of dollars to be lost in an
underground, uncontrolled marketplace ripe for
criminal exploitation." Revenues from
regulated internet gambling are estimated to be
between $8.7 billion and $42.8 billion over 10
years, according to a recent tax revenue analysis
prepared by PricewaterhouseCoopers. Through IHRA,
these revenues would be allocated annually to each
state through a new Transitional Assistance Trust
Fund. A state would be entitled to receive its
allotment based on its percentage of the total
population. To generate
additional support for IHRA, Rep. McDermott
circulated a letter to all members of Congress. It
includes a chart indicating projected allocations
of funding by state. Previously, a
framework to regulate and ensure the collection of
taxes on internet gambling activities was proposed
in companion pieces of legislation introduced by
Reps. McDermott and Barney Frank
(D-Mass.) The internet
Gambling Regulation and Enforcement Act (H.R.
2046), introduced by Rep. Frank in April 2007,
establishes an enforcement framework for licensed
gambling operators to accept bets and wagers from
individuals in the U.S. It would include a number
of built-in consumer protections, including
safeguards against compulsive and underage
gambling, money laundering, fraud and identity
theft. The legislation would also reinforce the
rights of States to control what, if any, level of
internet gambling is permissible within their
borders, including the ability to apply additional
taxes, and to ensure that appropriate consumer
protections and limitations were in
place. Rep. McDermott's
earlier bill, the internet Gambling Regulation and
Tax Enforcement Act (H.R. 5523), would ensure the
collection of taxes on regulated internet gambling
activities. A revised version of the bill,
introduced in March 2008, 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 equalise 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. |
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