3/9/08 - Las Vegas Review-Journal - View Source

When it comes to Internet gambling and Congress, common sense takes a holiday.
Perhaps a bill introduced last week will help change that.

In the waning days of the 2006 session, Congress outlawed online wagering, making criminals out of millions of Americans who enjoy playing poker or placing a casual sports bet via computer.

Of course, the notion that online gambling, a completely harmless activity for the great majority of those involved, will ever go away is delusional -- which says a lot about those in Congress who support the ban.

Since then, various efforts to repeal the prohibition have languished in committee. But on Wednesday, Rep. Jim McDermott, a Washington Democrat, announced he'll try again, this time appealing to his colleagues in a language they understand: money.

Legalizing Internet gambling could raise up to $43 billion for the federal government over the next 10 years, Rep. McDermott noted as he introduced the Internet Gambling Regulation and Tax Enforcement Act of 2008.

"Before us is a tremendous opportunity to protect consumers and recoup billions of dollars that should be collected by the Internal Revenue Service," said Rep. McDermott. "These are revenues that are desperately needed, given that we are at war and face difficulty financing the nation's priorities."

Frank Fahrenkopf, president of the American Gaming Association -- the industry's federal lobbying arm -- questioned the McDermott bill, saying he was troubled by federal regulation of the industry and a potential federal tax on gaming.

In fact, Mr. Fahrenkopf and the AGA are lukewarm on Internet gambling because it poses a competitive threat to brick-and-mortar casinos. Meanwhile, the federal regulatory structure now in place to enforce the ban -- which, among other things, requires banks and other financial institutions to police financial transactions used to place bets online -- is far more pernicious than any rules that would be needed in a legal environment to ensure tax compliance or protect consumers against fraud.

Rep. McDermott's bill would impose no new taxes, with the exception of a 2 percent licensing fee for operators, who would also be required to provide annual statements to customers documenting winnings and losses. Money generated by legalizing this consensual activity would come from our existing federal tax structure.

Rep. McDermott's legislation supplements a proposal by Rep. Barney Frank, who chairs the House Financial Services Committee, that would repeal the online wagering ban. Let's hope Rep. Frank can muster the votes to get both measures out his committee and onto the floor.
That, indeed, would represent a rare victory for common sense inside the beltway.

Protecting Children
Compulsive Gambling Safeguards
Secure Financial Transactions
New Government Revenues
Regulated and Licensed Environment
International Ramifications
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