U.S. Tax: Congress Continues To Debate How To Tax Internet Gambling

by Bryan Cross, 23 May 2010 -- With the legalization of online gambling becoming a hot topic of debate amongst officials, one large question remains relating to the taxation of the industry.

There was a meeting held last week where congress brought up this issue, with a clear and concise answer still yet to be determined.

Several members of Congress are not quite ready to sit back and watch as online casinos that a government-regulated begin to operate.

A bill introduced to the floor of the House Ways and Means Committee by Jim McDermott brings forth the idea to tax Internet gambling.

Estimates by McDermott say that he can produce $42 billion in tax revenue from players of online gambling.

John Pappas, who is a lobbyist for online poker said that the two opposing sides on the idea of Internet Gambling will have to make several compromises on the bill if it is to move forward.

"We've got to first win the war on whether Internet gambling should be regulated before engaging in battle over how it should be taxed," remarked Pappas, who is the president of the Poker Players Alliance. "I think this was putting the cart a little before the horse."

"Many (companies) that were opposed to Internet gambling years ago have come to see the light," Pappas added. "Progress and technology always win out. The bricks-and-mortar casinos don't want to be left holding the bag."

U.S residents currently have to bet offshore if they choose to wager through Internet gambling.

"Six to 10 billion dollars are presently being bet by U.S. residents offshore," remarked Frank Fahrenkopf. "If any cannibalization was taking place, it was probably already taking place."

USA Online Casinos are eagerly awaiting the decision relating to Internet Gambling, as the ruling could have a significant effect on the future of the market.