Democratic Representative, Jim McDermott, addressed the House Judiciary Committee recently where he outlined just how much money the USA is losing in potential tax revenue because of the UIGEA.
An independent detailed tax revenue study showed that if the USA would legalize and regulate online gaming, the taxes gleaned for the US coffers could be over 42 billion dollars over the next ten years.
Representative McDermott is the sponsor of a legislative proposal regarding online gaming, The Internet Gambling and Regulation and Tax Act (IGREA). In his address, he also stated that the IGREA had been fine tuned, to allow for increased revenue from legalized online gambling sites and to provide protection from potential tax cheats. He also outlined his proposal for a depositor’s fee, which would be paid by the operators of the gambling sites. Whenever a player made a deposit, the operators would have to pay two percent of the deposit amount to the government.
McDermott stated, "Even under the most conservative estimates, licensing and regulating Internet gambling and collecting the taxes will provide much-needed revenue to the US Treasury.” He estimated that by taxing online gambling, 3.1 to 15.2 billon dollars could be collected in tax revenue during the first five years. In the first ten years of regulation, the US could see a windfall of 8.7 to 42.8 billion dollars in revenues.
"Most of the revenues generated would come from taxes required under existing law that we currently lose because of a misguided belief that we can actually stop Internet gambling. This is money we are currently losing to other jurisdictions because some of my colleagues' think we can actually stop people from gambling online,” said McDermott.
The UIGEA has turned out to be a nightmare for Washington. Not only for the billions it is losing by not legalizing and taxing online gaming, but for the billions it may eventually cost the US. With the WTO ruling favoring Antigua and the other countries that have filed claims for compensation, the US may have a gigantic bill to pay.
Instead of reaping the rewards of online gaming, which would help with the huge budget deficit, Washington may see itself even deeper in debt. It is hard to believe the bureaucrats actually need an ‘independent analysis’ to confirm what a financial quagmire the UIGEA is for the USA.