IGREA introduced in US Congress to complement Frank bill

[The Buzz]

Congressman Frank McDermott (D-WA) introduced the Internet Gambling and Tax Enforcement Act of 2008, which is meant to complement Rep. Barney Frank's (D-MA) earlier legislation, which has not been acted on.

From a Safe and Secure Internet Gambling Initiative PR ...

“To be clear, these are not mostly new taxes -- the bulk of the revenues generated would come from taxes required under existing law,” said Representative McDermott in a letter circulated last year to all members of Congress. “This is simply a framework to collect taxes on existing activity that is currently unregulated, unsupervised, and underground.”

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.

“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.”

[The Buzz]

More on this from the Las Vegas Review Journal ...

Taxes on Internet gambling could raise between $8.7 billion and $42.8 billion in a decade, according to an analysis by the accounting firm PricewaterhouseCoopers that McDermott released last month. But Frank Fahrenkopf, president of the American Gaming Association, questioned those numbers.

Fahrenkopf said many states are unlikely to authorize Internet gambling even if the federal ban is repealed.

McDermott spokesman Mike DeCesare said the tax revenue estimate was made so wide in an effort to be credible.

"I still think the odds are very long that a bill (to repeal the Internet gambling ban) will pass in this Congress," Fahrenkopf said.

Fahrenkopf said he is troubled by the prospect of federal regulation and federal taxation of the gaming industry.

"This is a matter for the states, not the federal government," Fahrenkopf said.

McDermott's original bill had only one co-sponsor -- Rep. Neil Abercrombie, D-Hawaii. The bill he offered Tuesday has no co-sponsors.

http://www.lvrj.com/business/16328766.html