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McDermott Optimistic Of Congress Legalizing Online Gambling As House Committee Sets Hearing On Online Gambling Tax Bill

Posted on May 18th, 2010

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The House Ways and Means Committee which oversees all tax legislation in Congress is set to conduct a hearing Wednesday on a bill known as the Internet Gambling Regulation and Tax Enforcement Act sponsored by Rep. Jim McDermott, D-Washington. McDermott, who is upbeat on Congress voting to legalize Internet gambling this year, says the implementation of the UIGEA which will start on June 1 will only create more backing for his bill.

McDermott said, “We’ve got a lot of people who are going to be wrapped around the axle quickly by the regulations. When we understand the likely outcome of (UIGEA) down the road, it will be like Murphy’s law (if something can go wrong, it will). People will start to wonder if this is what they really wanted — how could we be so stupid?”

McDermott’s bill, which aims to tax online betting, is an attachment to Rep. Barney Frank’s bill which seeks to reverse UIGEA and calls for the regulation of Internet gambling by the Department of Treasury. It is designed to work along with Frank’s bill, acting as its tool by which to raise funds which McDermott says could reach $42 billion in ten years. Rep. Barney Frank, D-Massachusetts will testify at Wednesday’s hearing.

His own bill is set to be considered by the House Financial Services Committee on May 26. He and McDermott have agreed to schedule a hearing on McDermott’s bill ahead of Frank’s to show the result of taxing Internet wagering before any discussion on online legalization and regulation is done.

Roughly a fourth of the $42 billion in tax revenue that would be raised by the online gambling tax bill would be used to aid foster children in the country, which is McDermott’s special charitable project. McDermott has pointed out his observation that the Internet gamblers, the ones who are going to be taxed by his bill have not shown any indication of protest, which could simply mean that they want Internet gambling to be legalized and regulated.

McDermott says if Congress will not pass his bill this year, he will try again in a new session in 2011, because he says this is a good source of revenue for a cash-strapped government that is pretty much the current situation in most, if not all, of the states in the US.