Actually I don't think it is even a tax issue.
Bill Frist snuck this bill into a must pass unrelated anti-terror bill.
I think he wanted to do this in order to appeal to his base of crazy right wing religious fanatics. He was planning to run for president and this was going to be one of his credentials.
Unfortunately for him the Republicans got that asses handed to them in the last election. It was quite clear that even among the radical right and religious fanatics, his support was pretty poor. So his little plan backfired. But it still caused plenty of damage to the online gaming industry.
Interestingly Republican corruption being what it is, the anti-gaming legislation that Frist claimed was to stop gambling destroying families, actually completely legalized horse race betting, online lotteries, some fantasy sports betting and day trading. Nice to know a squeaky clean family values Republican can still be bought by a big enough lobby group.
So now we are left with the legacy of this stupid law. People lost their jobs, people lost their money, NETeller accounts have been frozen, and Americans are pariahs at all but a few online gaming sites.
What happened is despicable and outrageous. In the blink of an eye the law got changed, against the wishes of the majority of Americans. No discussion, no democratic process, just sneaky politics behind closed doors.
Thankfully the law does not actually set up penalties for players. It is still perfectly legal to play. But it is far harder for online companies to do business with Americans. I guess we should be grateful for that.
For my part I have joined the PPA. It would seem the only way to get a voice in government is to create a powerful lobby group. Perhaps with enough support the law will be changed. If poker is not your thing, try and find a lobby group for your particular gambling interest.
The anti-online gambling law that was snuck into the port safety bill was a protectionist move by lawmakers in order to bolster state lotteries and state/Indian casinos. Every dollar spent gambling online is a dollar the state doesn't get for its lottery. The states get a take for every gambling boat that goes afloat and every race track that offers slots and poker. The largest sucker bet is the state lottery. The chances of winning are literally millions to one. Yet, people in the lower income bracket are the ones that spend most on the lottery. This is money they can't afford, yet the state will advertise the lottery on billboards, TV, radio and in print. By any standard this is immoral. Yet, individuals who want to gamble online are treated like addicts. The fact is, many people who gamble online, especially poker, blackjack and backgammon actually win money. Every online casino offers free bonus money. That's free money to play with. There is no state lottery that gives away free lottery cards or free money. No gambling boat or Indian casino matches deposits with bonus money as the online casinos do. You, and everyone you know should contact their senators and congressmen to have this law repealed. And, no, it's not just about gambling. It's about personal freedom and your ability to spend your hard-earned money any way you see fit. The government should not be able to tell your bank or financial institution how to govern the way you spend your money. Protesting the anti-online gambling law is easy. Go to this site and let your reps know your money is your own: http://www.congress.org/congressorg/home/
yes ur totally right!!
It comes back the old saying..."If the government can't make money on it, then they want it banned."
This is true with internet gambling, sports gambling and even marijuana. They try and claim that they are banning internet gambling to protect the public, but they are really doing it because they can't find a way to tax it and make money off of it.
Our government is one of the best in the world, but they have become too strong and regulate almost everything in our lives now. They think they know what is best for us, but they are looking out for their own pockets. You know if there was a way for them to take 5% of every bet made in the U.S., George Bush himself would become a bookie just to collect!!
Good question, my friend. The government is worried about the winners in online gambling not paying taxes. It wants to assure it has a total control over capital flows. Imagine winning 1mln and then buying jewelry for that amount using your credit card. At the end of your day you haven't paid any taxes (whereas taxation on gambling income amounts 60% in the US.
But more importantly, online gambling sites can be incorporated anywhere in the world but still drain money from US citizens. The owner of the website will pay taxes to the country of incorporation (e.g Virgin Islands, where the rates are far lower).
So it turns out that funds are flowing out from the US to another parts of the world hence the government's worries.
It's very complicated anyway.
There are several problems with it:
1) All of the online casino's are located outside the US. States like Nevada and New Jersey are not happy because they can't get the tax money from internet casinos that land based casinos have to pay.
2) Many states that prohibit casinos are unhappy because their citizens are circumventing the law by gambling online.
3) There are many casinos online that are fraudulent, either by not paying out winnings, or by manipulating their Random Number Generator to make customers loose more than the mathematics of the game should have them at.
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