Rep. Jim McDermott, D-Wash., on Wednesday announced the results of an independent analysis of Internet gambling revenues in the United States revealing what could generate billions in federal revenues, and that banning it will only drive those revenues to other jurisdictions.
An analysis conducted by Pricewaterhouse Coopers estimates that regulating Internet gambling would generate between about $3.1 billion to $15.2 billion in federal revenues during its first five years, and between about $8.7 billion to $42.8 billion over its first ten years.
"Even under the most conservative estimates, licensing and regulating Internet gambling -- and collecting the taxes that are due -- will provide much-needed revenue to the U.S. Treasury," said McDermott. "This is money we are currently losing to other jurisdictions, for no other reason than some of my colleagues' think we can actually stop people from gambling online. It is money we will continue to lose if we ignore the fact that if grown adults in America want to gamble online, they can and they will."
McDermott, who in June introduced an Internet gambling taxation bill as companion legislation to the Internet Gambling Regulation and Enforcement Act, submitted the results as part of written testimony in the House Judiciary Committee hearing on the enforcement of the ban on Internet gambling.
McDermott's bill would establish a taxation scheme for Internet gambling activities licensed in the United States under the IGREA. It would impose a 2 percent tax on deposits paid by the operator.
"To be clear, 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," McDermott said. "Specifically, these are not new taxes, but rather taxes on existing activity that is currently unregulated, unsupervised, and underground."
Click here to view a copy of McDermott's testimony.