Taxing Online Gambling

July 27, 2008

How is it that you can tax something that is illegal? That is the question on many minds today as the government looks to start taxing the very thing they are trying to make illegal.

James McDermott is a democratic congressman from the state of Washington and he is trying to get winnings from online gamblers taxed. McDermott has submitted a bill called �Investing in our Human Resources Act of 2008.�

The bill is a two fold attempt to attack online gambling from two different ways. The first would attack online gambling itself as evil and corrupt, while the second would stand to make some money off of it. He has shown that there is a way to make roughly $40 billion off of online gambling and the money could go towards under-funded programs like social and educational issues.

This is McDermott�s second attempt to get online gambling taxed. He tried last year to get the Internet Gambling Regulation and Tax Enforcement Act, or IGRTEA passed, but it was eventually discarded as an unworkable bill. By penalizing the online payment systems that online gamblers use they are still not getting anywhere.

However, this recent one makes the online gambling industry happy because it would basically make online gambling legal. Not only that, but they have shown some support of the bill, which could, in some eyes, hurt the bill instead of help it. If voters see it as an attack on online gambling they could be against it, but those in office could be for it. It is a double edged sword for McDermott.






Back to July 08 Archive.