KEEPING ONLINE GAMBLING IN THE U.S. SPOTLIGHT

18 July 2008

McDermott introduces job training and foster care legislation funded by online gambling taxation


In a bold new legislative move in the United States, Rep. Jim McDermott (D-Wash.) has introduced legislation that proposes that a potential $40 billion over the next 10 years be spent on job training for the indigent and educational assistance for foster care youth. The legislation, "Investing in our Human Resources Act of 2008 (H.R. 6501)", would be funded through new revenue generated by regulating and licensing Internet gambling activities.

"We have an ideal opportunity to invest billions of dollars in American workers and our struggling economy without increasing the federal deficit," said Rep. McDermott. "IHRA would utilize a funding stream that would become available should Congress decide to legalize and regulate internet gambling, which would protect consumers and collect tax revenue that is currently offshore."

A provision in the legislation also encourages responsible Internet gambling behavior and an awareness of unsafe practices, something which has been praised by problem gambling advocates.

"I believe that the McDermott bill could be a positive step to help raise awareness about the dangers of unsafe gambling practices and the availability of addiction treatment," stated the Executive Director of the National Council on Problem Gambling Keith Whyte.

In a sign that the legislation has support from key members of the Democratic Congressional leadership, Reps. George Miller (D-Calif.) and John B. Larson (D-Conn.) are original co-sponsors of the legislation. Rep. Miller is a member of the Democratic Leadership and chairman of the House Democratic Policy Committee. Rep. Larson serves as vice chair of the Democratic Caucus and assists in organizing and running the Democratic Caucus.

Introduction of IHRA demonstrates the growing support in Congress to regulate Internet gambling, says the pressure group Safe and Secure Internet Gambling Initiative. Jeffrey Sandman, spokesman for the organisation said: "We need to change the current path, where the prohibition of Internet gambling allows for billions of dollars to be lost in an underground, uncontrolled marketplace ripe for criminal exploitation."

Revenues from regulated Internet gambling are estimated to be between $8.7 billion and $42.8 billion over 10 years, according to a recent tax revenue analysis prepared by PricewaterhouseCoopers. Through IHRA, these taxes would be allocated annually to each state through a new Transitional Assistance Trust Fund. A state would be entitled to receive its allotment based on a percentage of the total population.

To generate additional support for IHRA, Rep. McDermott circulated a letter to all members of Congress. It includes a chart indicating projected allocations of funding by state. A copy of the letter is available at www.safeandsecureig.org/media/mcdermottdearcolleague-IHRA.pdf.

McDermott's new initiative follows an earlier proposal - H.R. 5523 - relating to online gambling taxation that was widely seen as a companion and supporting bill for Congressman Barney Frank's Internet Gambling Regulation and Enforcement Act, which proposes a regulatory and licensing regime for online gambling in the United States and has 48 sponsors in Congress (see previous InfoPowa reports).

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