3825's Blog

Congressional Progress On Internet Gambling Laws

By 3825 | View all Posts
Posted Tuesday, August 26, 2008 11:14 PM   8 comments

H.R. 2607 and H.R. 2046 are potential legislation that could bring about the legalization of internet sports gambling in the U.S.

H.R. 2046 in summary . . . In effect, makes internet gambling legal.

Internet Gambling Regulation and Enforcement Act of 2007 - Amends federal law governing monetary transactions to establish an Internet Gambling Licensing Program administered and enforced by the Director of the Financial Crimes Enforcement Network (Director).

Prescribes requirements for the licensing of Internet betting or wagering.

Provides that activities involving investment banking, payment and transaction processing, and financial transactions are shielded from liability if they are conducted in compliance with this Act and specified law.

Authorizes states, Indian tribes and sporting leagues to prohibit internet gambling licenses.

 

H.R. 2607 in summary . . . In effect, provides taxation framework.

Internet Gambling Regulation and Tax Enforcement Act of 2007 - Amends the Internal Revenue Code to establish licensing requirements and fees for Internet gambling operators.

Requires Internet gambling operators to pay to the Director of the Financial Crimes Enforcement Network during each 30-day period of operation a license fee of 2% of all bets and wagers placed during the preceding 30-day period.

Requires the Director to grant Internet gambling licenses to applicants who meet criteria set by the Director and are generally fit to engage in the business of Internet gambling. Requires such operators to adopt appropriate mechanisms to ensure the collection of all taxes and license fees relating to Internet gambling that become due to federal and state governments.

 

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3825 says:
08/26/08 11:15PM
Latest Update on HR 2046 . . .

4/26/2007:

Referred to the Committee on Financial Services, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

4/26/2007:

Referred to House Financial Services

4/26/2007:

Referred to House Energy and Commerce

4/30/2007:

Referred to the Subcommittee on Commerce, Trade and Consumer Protection.

3825 says:
08/26/08 11:17PM
Latest Update on H.R. 2607

6/7/2007:

Sponsor introductory remarks on measure. (CR H6166)

6/7/2007:

Referred to the House Committee on Ways and Means.

3825 says:
08/26/08 11:19PM
This is what Rep. Jim McDermott said during his allowed one minute speech when he introduced HR 2607

"Mr. Speaker, I was raised in a fundamentalist Christian home that cast a dim view on gambling. I didn't care for it much then, and I don't care for it now.

While the Bible never directly uses the word ``gambling,'' there are plenty of references to it in Scripture, and none of them are very kind.

Still, from lotteries to casinos, gambling is part of the American scene today. Across the country, governments derive revenue from gambling that flows into public coffers. Whether you call it a sin tax or self-imposed tax, it helps fund good social programs.

Today, gambling has migrated online where it is unregulated, off shore and exporting billions of U.S. dollars. Basically, we have a Wild West show with few protections for Americans against fraud, underage gambling and privacy.

My colleagues, Barney Frank and Peter King, have introduced legislation to establish some order and law online with licensing and regulation. I am introducing a companion bill today that establishes the process to collect some of the gambling revenue online just as we do in the communities.

If we decide as a Nation to enable gambling online, the billions of dollars flowing out of this country should remain here to help us fund schools and bridges and a host of social programs that need more than luck to succeed."

3825 says:
08/26/08 11:26PM
In addition to HR 5523 is also in the congressional pipeline.

This bill was introduced by Jim McDermott in March of 2008

Internet Gambling Regulation and Tax Enforcement Act of 2008 - Amends the Internal Revenue Code to: (1) impose an Internet gambling license fee on Internet gambling operators; (2) require such operators to file informational returns identifying themselves and the individuals placing wagers with them; (3) require withholding of tax on annual Internet gambling winnings of more than $5,000; (4) impose a 30% tax on the Internet gambling winnings of nonresident aliens; and (5) impose the excise tax on wagers on any individual who places a wager with an unlicensed Internet gambling operator.

Rizzo says:
08/28/08 09:39AM
Good info
3825 says:
08/31/08 03:55PM
Here's an interesting article I found at cardplayer.com, (i googled HR 5523) When I first read through HR 5523 last week, i failed to see the tie in with Social Security.

Wash. State Lawmaker Jim McDermott Introduces Second Bill Concerning Online Gambling Taxation

A Washington state congressman introduced legislation to amend the Social Security Act in order to establish a trust fund that would be filled by taxing Internet gambling in the United States. This is House Rep. Jim McDermott’s second time introducing a bill that pushes for taxation and regulation of Internet gaming.

The act is the Investing in Our Human Resources Act of 2008 (H.R. 6501), and the fund would be used to “provide opportunities to individuals who are, or were, in foster care and individuals in declining sectors of the economy,” according to its introduction.

McDermott was not available for an interview due to his schedule, according to his media director.

According to the Safe and Secure Internet Gambling Initiative (SSIGI), the Social Security Administration would receive an average of upwards of $1 billion a year by regulating and taxing online gambling over the next 10 years. SSIGI is a dot-org lobbying organization that “promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions.”

McDermott’s resolution doesn’t estimate the amount that could be earned by tapping into online gambling’s earnings pipeline, nor does it define how the United States government should go about taxing and regulating the industry it is currently trying to snuff out. This bill simply stakes a claim for a chunk of online gambling revenue that currently passes to and from American customers for Social Security. It was introduced July 15 and has two co-sponsors, Connecticut Rep. John Larson and California Rep. George Miller. All three men are Democrats.

The lawmaker introduced his first bill concerning online gambling in March. H.R. 5523, the Internet Gambling Regulation and Tax Enforcement Act of 2008, calls for an amendment of the Internal Revenue Tax code of 1986 to regulate and tax online gambling.

H.R. 5523 calls for the IRS to set up office to license, regulate, and collect taxes from online gambling companies. This bill calls for the online sites to pay a monthly licensing fee, company taxes, as well as to collect taxes from its players for the government. That bill has no co-sponsors.

This proposal remains in the House Ways and Means committee, as does H.R. 6501, mentioned above. (H.R. 6501 also is in the House Labor and Education Committee.)

Both the bills can be viewed in their entirety at the Library of Congress website. Simply use the H.R. numbers as search values to find them.

3825 says:
09/19/08 08:10PM
This is a response i got from the Office of Rep. Jim McDermott. I had asked for an update on the status of the aformentioned bills. Note the word "continued" in his first sentence, they must have noted that I've emailed them before.

"Thank you for contacting me with your continued interest in HR 2046, HR 2607, and HR 5523. These bills are being discussed by my colleagues and their staff and are being analyzed by the Joint Committee on Taxation. New ideas such as these often take time for people to understand and the primary goal is to raise understanding and comfort in these proposals.

Again, thank you for contacting me. I look forward from hearing from you again in the future."

gfoss59 says:
05/31/09 05:43PM
Absurd that it doesn't exist. But don't look for it soon... though I hear Deleware...

When will we learn (e.g., war on drugs)?

Biggest problem, I think, is that Vegas doesn't like it. I don't see a lot of action against it, but they don't like it.

I'm interested in this issue -- please drop a chap a note.

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User: 3825
Joined: January 2006
Location: British Columbia
Team: Seattle Mariners
Occupation: Recreation

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