Taxing Online Gambling

May 15, 2009

There are some concerns in the online gambling industry regarding the bill introduced by Rep. Jim McDermott of Washington. McDermott wants to tax online gambling, which in itself does not come as a surprise. However, the way he is considering taxing online gambling does.

The bill was introduced by McDermott who is also a member of the ways and Means Committee, and he says that we have to tax online gambling in order to make money off of the industry. According to PricewaterhouseCoopers � the United States could be looking at around $48.6 billion annually from the online gambling companies if they were to be taxed

However, some online gambling advocates are concerned that the way that taxation would take place might cause some of these companies to not register within the US because the rate is too high. The online gambling companies were aware that they were going to be taxed, and they thought that it would be on the amount of money that they made � their profit at the end of the day. However, the new bill would tax them on any money that is brought into the online gambling establishment, not taking into consideration losses and payouts.

This leaves the online gambling community wondering how many of the casinos will choose not to come back if they are paying that high of a price to be a part of the US regulated community. They say that they saw it happen in the UK where they taxed them too high and they lost many of their online casinos � and they don�t want to see that happen here. They think that perhaps although they are for taxing the online gambling industry, there may be room for tweaking in the taxation structure.


 

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