US lawmakers consider Internet gambling bills

* Tax could raise $42 billion over a decade

* Banks now banned from certain transactions

By Kim Dixon

WASHINGTON, May 19 (BestGrowthStock) – Internet gambling should be
legalized and taxed in the United States to raise $42 billion
in revenue over a decade and legitimize gamers who bet online,
backers argued before a congressional panel on Wednesday.

“We are talking about a decision by adults to do what they
want to do with their own money,” said Democrat Representative
Barney Frank, who sponsors a bill to legalize online gaming,
citing John Stuart Mill’s essay “On Liberty” to make his
point.

Frank spoke at a Ways and Means Committee hearing in the
House of Representatives.

The House is considering two Internet gambling bills. One
would legalize it. The other would require people to declare
winnings from online gambling to U.S. tax authorities and set a
0.25 percent tax on wagers of all federally licensed bets.

While the multibillion-dollar Internet gambling industry is
not illegal per se, it soon will be illegal for financial
institutions to knowingly accept payment in online gaming
transactions, under a law that is set to take effect in June.

That law makes an exception for fantasy football and horse
racing.

If all states took part, taxing online gambling could raise
about $42 billion over a decade, according to the joint
congressional tax committee.

Frank first introduced his proposal several years ago, but
it could gain momentum this time as lawmakers hunt for money to
balance the $1.4 trillion budget deficit.

Washington Democrat Jim McDermott sponsors the tax bill,
but not all Democrats back it. Some Republicans favor it, but
others cited moral concerns.

“People sometimes resort to drastic things when they are
strapped for cash,” Representative Bob Goodlatte, a Virginia
Republican, said. Still, he said states should be able to make
the decision on their own.

States can opt out of the law if it passes. Utah and Hawaii
ban gambling.

Privately held Harrah’s Entertainment, the biggest casino
company, backs legalizing online gambling, but not the House
bill on taxation.

Rival MGM Mirage (MGM.N: ) said it has no position on the tax
bill, but supports legalization and taxation in some form.

The Obama Administration has not taken a position.

Investing Research

(Reporting by Kim Dixon. Editing by Robert MacMillan)

US lawmakers consider Internet gambling bills