Wednesday, May 6, 2009

Budget Shifts to Raising Sin Taxes on Cigs, Al K. Hall, and now Internet Gambling and maybe even Marijuana, Fiscal Liberalism in Emergency Room Mode..

WASHINGTON (Dow Jones)--A senior House Democrat introduced bills Wednesday that would suspend rules banning Internet-based gambling and seek to regulate it instead. A third bill introduced by a Democratic member of the Ways & Means Committee would ensure that online gaming companies would start paying taxes to the U.S. According to a recent study from consultancy PricewaterhouseCoopers, the U.S. Treasury could stand to gain $48.6 billion annually by taxing online gambling companies. This is the second consecutive year that the bills have been brought forward, in an attempt to undo a move in the dying days of the Republican-controlled Congress in 2006 to ban Internet gambling. House Financial Services Chairman Barney Frank, D-Mass., said Wednesday at a press conference introducing his bills that he hadn't spoken to either House or Senate leadership, nor to the Obama administration about the bills. But he said he planned to push the legislation through his committee before Congress breaks in August. Rep. Jim McDermott, D-Wash., is the author of the bill that would tax regulated online gaming companies. The ban is set to go into place in December 2009, after the Bush administration moved to put rules enacting the ban in place in its final weeks at the end of 2008. Frank's legislation would allow companies to apply for a license allowing it to provide its gambling services to U.S. residents. Applicants would have to meet the same standards as individuals wanting to work in the Las Vegas gambling industry. They would have to be willing to subject to a review of their financial condition, corporate structure and business experience. Companies would have to put in place controls to ensure that neither minors nor residents in states with laws in place banning online gambling could access their sites. It would also attempt to mollify the concerns of professional sports leagues by continuing a prohibition on gambling on professional sports. Under the rules that are currently set to go in place, it would be up to financial services companies that process credit and debit card transactions to determine which are related to illegal gambling activities. As such, the industry strongly objected to the rules, arguing that they shouldn't be expected to be sheriffs determining what transactions are against the law. Frank said that Rep. Shelley Berkley, D-Nev., who represents Las Vegas, is one of the co-sponsors of the bill. Berkley was a vocal supporter of a ban on online gambling in the past. The American Gaming Association, which counts among its members many of the large casino operators, has decided to remain neutral over the issue. The group had been another strong opponent of online gambling in the past. -By Corey Boles, Dow Jones Newswires; 202-862-6601; Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires May 06, 2009 14:00 ET (18:00 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 00 PM EDT 05-06-09


Anonymous said...

Maybe IGT or CRYP or GOOG benefit?
LOVE internet gambling, love your blogging psychology too. A fun mix of fiscal and even social issues day after day. Thousand times more enjoyable than most cable news.

Anonymous said...

Actually think legalizing everything is good short-term fiscal thing, but what are the long-term social consequences? I like the post and insights a lot!

Anonymous said...

What happened to Obama saying no tax hikes for the middle class. What if you smoke and drink, are those not considered tax hikes on the poor to middle class?