SSIGI TO SUPPORT U.S. TAXATION AND LICENCING FOR ONLINE GAMBLING

8 June 2007

Financial group says Internet gambling could provide up to $25 billion in taxes over next 5 years

There has been a notable increase in the momentum of opposition to the Unlawful Internet Gambling Enforcement Act this week. The unpopular law, which passed last year in questionable Congressional manouevring, seeks to disrupt financial transactions with online gambling companies and has inconvenienced tens of thousands of American online gamblers and inflicted severe losses on gambling companies.

Congressman Barney Frank's counter legislation, HR 2046 Internet Gambling Regulation and Enforcement Act seeking to licence and regulate the pastime in the USA was this week backed by a second and companion proposal titled the Gambling Regulation and Enforcement Act from Democrat Congressman Jim McDermott. The new bill proposes a taxation regime for online gambling companies to be licensed under the Frank bill.

First to voice its support for the McDermott proposal was the Safe and Secure Internet Gambling Initiative - an organisation intent on mobilising supporters across the USA to support regulated Internet gambling.

"The government should not be telling Americans what we can and can't do on the Internet," said Jeffrey Sandman, spokesman for the Initiative. "By prohibiting a popular, recreational activity that many millions enjoy in the comfort of their own homes, the U.S. is also losing out on the opportunity to collect billions in revenue."

Congressman McDermott's legislation is expected to generate between $6 billion and $25 billion in revenues for the U.S. Treasury in the first five years of enactment.

Regulated Internet gambling would protect an individual's freedom to use the Internet as they choose, generate funding for critical government programs and protect against underage gambling, compulsive gambling, money laundering, identity theft and fraud, says the SSIGI. Current efforts to prohibit Internet gambling are futile, as many Americans continue to gamble online, but without safeguards and protections.

Frank and McDermott propose that each Internet gambling operator licensed for US operations by the Financial Crimes Enforcement Network would be required to pay a fee of 2 percent of all funds deposited by any person placing a bet. The license fee would be paid solely by the Internet gambling operator and would not be deducted from the deposit of the person placing a bet. Licensed operators would also be required to ensure the collection of applicable federal and state taxes from licensees and from individual gamblers.

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