A tax revenue analysis announced by Representative Jim McDermott (D-WA) estimates that regulating Internet gambling would generate between $3.1 billion to $15.2 billion in federal revenues over its first five years, and between $8.7 billion to $42.8 billion over its first ten years. The data, based on a detailed analysis provided by an independent accounting firm, was provided in testimony submitted to the House Committee on the Judiciary where McDermott also detailed policy refinements to his legislation, the Internet Gambling Regulation and Tax Enforcement Act.

“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.”

The Internet Gambling Regulation and Tax Enforcement Act has been refined to provide better protections against tax cheating and thereby increase federal revenue from permissible Internet gambling activity. The only new fee proposed is a payment equal to two percent of player deposits placed with a licensed gambling operator – fees paid by the operator, not the individual gambler. The two percent deposit 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.

“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,” said McDermott. “Specifically, these are not new taxes, but rather taxes on existing activity that is currently unregulated, unsupervised, and underground.”

McDermott’s legislation functions as a companion bill to the Internet Gambling Regulation and Enforcement Act, legislation introduced by Representative Barney Frank (D-MA) which would establish a licensing and enforcement framework for regulated Internet gambling in the U.S.

Based on a provision in Frank’s legislation that permits individual states and sports leagues to prohibit any Internet gambling, the lower figure of projected revenue from regulating Internet gambling reflects a situation in which sports leagues and most states opted-out of the system. An additional estimate of $6.3 billion over five years and $17.6 billion in revenue over ten years is based on an assumption that the sports leagues opt-out entirely and the states that permit gambling activities in brick and mortar casinos world permit the same activities online.

“By prohibiting a popular, recreational activity that many millions enjoy in the comfort of their own homes, the U.S. is forfeiting billions of dollars in revenue needed for critical government programs,” said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. “It is time for Congress to regulate and tax Internet gambling to ensure security controls are in place to protect consumers and capture billions in revenue. Moreover, regulating Internet gambling could resolve a dispute around Internet gambling in the World Trade Organization that could force the U.S. to pay billions in trade compensation.”

Click here to go to the press release.

With time running out, the tiny Caribbean island nation of Antigua and Barbuda holds the cards in a dispute over Internet gambling that could ultimately cost the United States billions of dollars.

If arbitration efforts fail, Antigua and other aggrieved parties, including the European Union, could begin exacting sanctions as early as next month over the U.S. decision to withdraw from a World Trade Organization accord recognizing the legality of Internet gambling.

Antigua is seeking sanctions worth $3.4 billion, and has suggested it might claim that sum by becoming a harbor for pirated intellectual property such as movies and musical recordings. Total sanctions claimed by the EU, India and other countries approach $100 billion, although the United States, in negotiations, contends that appropriate levels of compensation would be far less.

Eight House Democrats, including Judiciary Committee Chairman John Conyers and Financial Services Chairman Barney Frank, on Monday wrote U.S. Trade Representative Susan Schwab expressing surprise that the USTR had moved on the issue without consulting with Congress on possible solutions. The lawmakers said they viewed the administration action “as a drastic step which could have significant consequences for the entire WTO system.”

Antigua in 2003 initiated WTO dispute proceedings against U.S. federal and state laws barring foreign participation in U.S. Internet gambling markets. The WTO, in rulings in 2004 and 2005, found that the United States had violated its 1994 General Agreement on Trade in Services, or GATS, which the WTO says allows Internet gambling.

The USTR responded last May by asserting that U.S. laws banning interstate gambling have been in place for decades. When GATS was being negotiated, said Deputy U.S. Trade Representative John K. Veroneau, “no WTO member could have reasonably thought that the United States was agreeing to commitments in direct conflict with its own laws.”

The United States, he said in his May statement, had decided “to exclude gambling from the scope of the U.S. commitments under the GATS.”

“This might be regarded and is regarded by many as a cynical manipulation of the system — you lose the game, so you try and change the rules,” WTO arbitration expert Joseph Weiler, a professor at the NYU School of Law, told Conyers’ committee last week.

Click here to go the article and read more.

The Bush administration should explore legislation to roll back a U.S. ban on Internet gambling instead of paying compensation to the European Union and other trading partners, the chairmen of two House of Representatives committees said on Monday.

House Financial Services Committee Chairman Barney Frank, House Judiciary Committee Chairman John Conyers and six other lawmakers criticized the Bush administration’s handling of the issue in a letter to U.S. Trade Representative Susan Schwab.

“Your agency has chosen not to consult with Congress, but instead to take what we view as a drastic step which could have significant consequences for the whole WTO (World Trade Organization) system,” the lawmakers said.

Rather than comply with a negative WTO ruling in a case filed by the Caribbean nation Antigua and Barbuda, the United States announced earlier this year it was “clarifying” it never intended to allow foreign firms to offer Internet gambling services as part of the 1994 Uruguay Round trade pact.

That opened the door for other trading partners to demand compensation for the United States’ decision to retroactively exclude Internet gambling from its commitments under the General Agreement on Trade in Services, or GATS.

The United States has been in negotiation with the EU, India, Japan, Costa Rica, Macao, Canada and Australia on a compensation package and the trading partners recently set a new mid-December deadline for reaching a deal.

Click here to go to the article and read more.

The National Poker Challenge poker room in Little Rock was shut down Sunday night. Little Rock police arrested the owner and four dealers and charged them with keeping a gambling house, a class D felony.

When the poker room opened in September, police and the City Attorney said the operation would be illegal under Arkansas law. National Poker Challenge maintains that the poker room does not break gambling laws, because players don’t have to buy into games, although they can pay to track their statistics.

“I’m not too worried about the semantic jousting over whether something is or is not gambling, is or is not of value, whether something is or is not winning or losing,” said Jegley.

National Poker Challenge said that it checked with various lawyers besides the city attorney, and they advised that the play would not constitute gambling.

Also Sunday, Little Rock police confiscated equipment at the poker room on Rodney Parham and Reservoir, effectively stopping operations there.

Click here to go to the article.

The House Judiciary Committee hearing about online gambling may have swayed at least one congressman in favor of legalizing the industry. On Thursday, Rep. Earl Blumenauer (D-Ore.) signed on as a co-sponsor of the Internet Gambling Regulation and Enforcement Act.

The IGREA was introduced by Rep. Barney Frank (D-Mass.) in April and seeks to legalize, license and regulate online gambling in the United States.

At this time, the government points to legislation such as the Wire Act of 1961 as making online gambling illegal. More recently, the government passed into law in 2006 the Unlawful Internet Gambling Enforcement Act which restricts financial transactions meant for gambling online.

Blumenauer was actually among the representatives who voted to approve the UIGEA in 2006. It appears he’s now switching his opinion and supporting the new legislation that would legalize Internet gambling such as online poker and online casinos.

Click here to go to the article and read more.

Read the rest of this entry »

Cribbage players are confused.

Lawmakers are confused.

And Maine State Police say rules governing games of chance are anything but easy to explain.

Two weeks ago, a state inspector shut down cribbage games and tournaments at American Legion Post 4 in Gardiner.

The inspector told players their game was illegal because the Legion did not have a license to host games of chance.

Since an article about Post 4 appeared in the Kennebec Journal last week, Sgt. William Gomane of the State Police said he has been “fielding calls” from the public.

“These rules are not easy to understand and it’s hard to explain to people,” Gomane said. “Without knowing the circumstance, it’s difficult to say (if a game is legal or illegal). If it’s a community center and it’s social gambling, it’s legal. If you went to a place where you have sports betting in a for-profit bar, it’s illegal.”

THE LAW SAYS

So what is social gambling?

Title 17-A: Maine Criminal Code Chapter 39 Unlawful Gambling, says: “Social gambling is gambling, or a contest of chance, in which the only participants are players and from which no person or organization receives or becomes entitled to receive something of value or any profit whatsoever, directly or indirectly, other than as a player, from any source, fee, remuneration connected with said gambling, or such activity as arrangements or facilitation of the game, or permitting the use of premises, or selling or supplying for profit refreshments, food, drink service or entertainment of participants, players or spectators.”

Quite a mouthful.

Some people, including Post 4 American Legion Cmdr. Bob Mckay and Rep. Earle McCormick R-West Gardiner, believe the rules were part of a bill that passed in the last Legislative session that dealt with Texas hold ‘em card games.

The bill granted charities the right to run Texas hold ‘em tournaments six times a year.

Click here to go the article and read more.

Gaming companies are well-positioned for the eventual spread of legalized Internet gambling to the United States, top executives of the world’s two largest casino operators said Wednesday during a panel discussion at the Global Gaming Expo.

Terry Lanni, MGM Mirage’s chairman and chief executive officer, said the company’s first venture into Internet gaming may have been unsuccessful financially, but it laid the groundwork for the company to return when the time is right.

“We closed the operation down with the thought that we know what we’re doing, and we’re prepared to do it if and when it becomes legal here,” Lanni said.

The company set up an Internet gaming site in 2001 in the Isle of Man but quickly folded the operation. The site lost money because the company elected to undergo a more stringent registration process than its competitors.

However, the endeavor helped the company work out problems that will be useful when relaunching, such as how to determine a bettor’s age and location and how to protect problem gamblers.

Lanni and Gary Loveman, Harrah’s Entertainment’s chairman and CEO, agreed that Internet poker will be legalized ahead of other casino games, partially because of its popularity. Loveman predicted online poker would be legalized in the United States in the next 18 months to two years. Lanni predicted 12 months to 18 months.

Harrah’s, which owns the World Series of Poker brand, is already looking at the possibility of establishing branded online sites in jurisdictions that clearly allow online gaming, which includes many Caribbean countries and many members of the European Union.

Click here to go to the article and read more.

For Immediate Release

Congressional
Hearing Dispels Internet Poker Myths 

~ Annie Duke delivers
impassioned testimony to the Judiciary Committee ~
 

Washington, D.C.
(November 14, 2007) – Yesterday the House Judiciary Committee, which has key
jurisdiction over Internet gaming matters, held a hearing to discuss the
inconsistencies with U.S policy.  On behalf
of the Poker Players Alliance (PPA), Annie Duke testified along with experts on
international trade, age-verification technology and representatives from the
Departments of Justice and Treasury. 
Read the rest of this entry »

The Poker Players Alliance will be posting accounts of PPA members defending poker in their state. Here is the latest information from Lee Rousso, PPA State Representative of Washington, who is filing legal action against the State of Washington.
Read the rest of this entry »