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House Proposes Legalizing, Taxing Online Gambling
eldavojohn writes "Passed in 2006, the Unlawful Internet Gambling Enforcement Act is set to go into effect June 1. New efforts by Democrats in the House of Representatives aim not only to stop that but to legalize and tax Internet gambling. Jim McDermott (D-WA), said, 'This is a huge boon to the state governments. If you look across the country you're seeing programs cut. In Arizona, they just cut out a program for children's health for 40,000 kids. Here's a source of money.' Basically, the bill proposes that for each state, a 6% cut would be taken from all wagers and go to the state in which the bet was made online, while federal would get 2%. They estimate in the next decade this would amount to $30 billion for state and tribal governments and $42 billion for the federal government in new taxes. Banks and casinos appear to be very much on board, while the usual crowd (Republicans, Focus on the Family, Think of the Children) gathered in opposition to the move."
I have a tendency to agree. Despite the social problems gambling brings. Just like alcohol, it seems better to tax it instead of watching the profits go somewhere else.
Everything I write is lies, read between the lines.
what better way to fund state governments than predating upon the weaknesses of your citizens.
Ten bucks says you're wrong, sucka!
why "Republicans" are against this?? Aren't they supposed to be in favor of small goverment and fewer regulations? This is exactly why the tea parties are becoming so big, we should be able to do what we want with our own money in a free society, as long as it doesn't harm anyone else. To paraphrase Thomas Jefferson Who cares? "It neither picks my pocket nor breaks my leg."
Given that many of the current online gambling sites are run anonymously by organized criminal networks outside the US, how would collection or enforcement work? Would gamblers be obliged to write how much they won on their annual tax returns, like we're supposed to note purchases made online?
Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
It's a tax on deposits made into an online casino. Huge difference.
a) Instead of showing ANY fiscal restraint, the governments kept expanding to take advantage of the property tax bubble.
b) low interest rates pushed forward a lot of activity in the home building market, creating a lot of jobs which will not be replaced.
c) the executive class, whose pay has increased from 50x average to 450x average is actively shipping jobs overseas (to the tune of thousands).
d) the long term trend is wages will stagnate or drop towards those in BRIC. (brazil, russia, india, china). This means the value of houses, etc. will drop because people will have a smaller amount of money for paying for property. Smaller incomes also mean smaller taxes for the governments.
So the long term trend is lower property taxes, lower property values, fewer jobs, lower paying jobs.
The governments are going to absolutely hate it, but they are going to have to cut a lot of programs outside of welfare/unemployment benefit programs to prevent social unrest.
People's expectations of living in a 3,000 square foot house are going to have to reset back to 1600 square foot houses (or even the 1100 square foot houses prevalent in the 1950's.
And that's ignoring the scarily fast advances in robotics lately. An entire swath of basic manual jobs are on the verge of going away in a few years.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Comment removed based on user account deletion
That sounds pretty extortionate. Consider that many games have a return rate in the high 90%s.
Previously a hundred dollars could go through dozens of wagers before being reduced by half on average. Now, that same hundred will provide much fewer wagers for the the same game.
I am actually more of a social conservative than most of these groups, and I fully support legalizing and taxing this. If you want people to be responsible, they have to have freedom. It's just that simple. A society where people don't engage in victimless crimes because the state is putting a gun to their head isn't a more moral society, it's just one where we pretend that everything is hunky dory.
It seems to me that it would be inherently hard to monitor online gambling to ensure that the people running the online casino are actually playing fair. After all, it would be fairly trivial to set up a website to take peoples money but behind the scenes code it such that nobody ever wins. Of course, if nobody ever wins anything, they'll eventually stop playing, but you could easily set rules to feedback just enough money to keep them interested. Maybe return 80 cents on the dollar, but have code make sure that nobody can ever break even.
How would the federal government handle this? Do they insist on seeing the full source code running on every online casino site? If they do, how do they know the code the casino gives them is the actual production code? Basically, it would be too easy to load the dice at an online casino and take everybody's money.
This isn't a comment on the morality of gambling in general, or whether or not it's a good thing. It just seems like it'll be too easy to rip people off using some [not even that] clever coding.
For example, "the lottery" has regularly been shown to basically be a "poor tax." Isn't there a "usual crowd" who speaks out against regressive taxation? Aren't they leftists?
I would actually argue it is more of a "stupid tax" but I also feel that way about most forms of gambling.
How might such a law affect video game assets in the face of taking gambles? If I buy, with real money, a bunch of in-game loot and then take a gamble on successfully defeating the other team, or open up a second-life gambling casino, what would the government tax me on? my video game fees? my profits from selling loot?
The summary stated that they would take 6% for state and 2% for Fed on each WAGER... That is incorrect... they are taking 6%/2% of your DEPOSIT in the online gaming account. If they took 6%/2% of your WAGERS, you'd be broke in no time!
Given this level of taxation, I'd be in favor, just for the legalization aspect alone... I'm generally not in favor of "feeding the beast" with more tax revenues, but if it gets me legal online gaming, then I'm okay with it.
Brawndo: It's what plants crave!
Basically, the bill proposes that for each state, a 6% cut would be taken from all wagers
First, what? Of all wagers, win or lose? Right now, you can hypothetically wager for an indefinite amount of time if the odds of winning are 50/50 (which they aren't but play along) and you never fall to zero. If each transaction is taxed, then you lose 6% on each hand, automatically, no matter what? I hope that's just poorly written.
Second, I'm against expanding gambling. Proponents point to Las Vegas and think that Spitsville, Arkansas will be just like that if only they legalize Keno. Well, no. What always happens is that the people who can least afford new, expensive habits end up losing everything. Crime goes up. Social service costs go up. Law enforcement costs go up. And the expenses are never covered by the trickle of tax revenue. Seriously, if you're against regressive taxes, then you kind of have to be against the realities of gambling. Warren Buffett isn't going to go broke on the craps tables, but Joe Sixpack very well might.
But more than that, I hate the outright lies told by the gambling lobbyists when they're trying to get it legalized. I lived in Missouri when they were voting on whether to add riverboat gambling. The idea is that all the taxes from it would go to education. How can you vote against that and take money away from the kids? Well, they were kind of telling the truth. What really happened was that if the education budget was $X (I forget the actual numbers involved), and the tax revenue from gambling was $Y, then the new education budget was still exactly $X. The difference was that $Y of it came from gambling, and the rest came from the general fund as usual. Furthermore, the total amount of taxes collected did not go up, as a lot of the hypothetical extra revenue was lost to decreased sales taxes, lowered property values, etc., while service expenditures went up quite a bit. A couple of years into the grand experiment, it looked like Missouri was losing about 3*$Y from their bottom line. The casino's owners, on the other hand, were quite happy to export the revenues to their own state and let someone else clean up the mess.
I'm pretty libertarian in my views. If you want to do something and it doesn't harm anyone but yourself, then have at. Contrary to the tone of the summary, I have no moral objections to gambling whatsoever. In practice, though, gambling seems to cause a lot of collateral damage around its participants. I guess I lump it in with smoking in restaurants; although I understand the arguments for allowing it, I have to admit that I've enjoyed not having it around anymore.
Dewey, what part of this looks like authorities should be involved?
Why is it totally different when something is done "over the internet?" Gambling is illegal in person, but it is legal if a network cable is involved?
Suppose I setup a gambling room where everyone goes into their own stall and gambles "over the internet." If they will, I will give them their winnings right away, then take the payment over the phone. Maybe I offer this service for free and just profit by selling drinks. Of course, maybe they are actually playing against the person in the stall next to them, but that's legal now because it is was "over the internet."
I'm not against this bill per se, but it is silly that if you did the same exact thing, but without the internet involved it would be illegal.
What group is he talking about when he mentions "Think of the Children" as one of the "usual crowd gathered in opposition"? When I googled for a non-profit called "Think of the Children", the only thing that came up is a group that works to help orphans in Vietnam. I really can't see them taking a stand on this (and I checked their website.
Part of the problem with the summary (besides listing a group that as far as I can tell doesn't exist) is that it lumps all of the opposition to this into one group. Focus on the Family opposes this because of the documented negative effects that gambling often has on families when one or both of the parents gamble away the money needed to take care of their children (whether that is a sufficient reason to outlaw gambling is another question, as is whether outlawing gambling actually addresses the real problem in those situations). The point is that it makes sense for Focus on the Family to oppose anything that moves gambling further into the "acceptable" social area.
Republicans in general are more likely to oppose this as a new tax than because of its legalizing online gambling. Do you really think that this won't be used as an excuse for the government to monitor everyone's internet usage because some people are avoiding the tax?
The truth is that all men having power ought to be mistrusted. James Madison
And considering recent events on Wall Street, gambling houses actually give you a fairer deal.
QFT, at least in Nevada. For casino floor games to be certified by the state they have to more or less gaurantee their odds--you know exactly what you're getting at craps, slot machines, video poker, or blackjack. Hell, the electronic gambling machines have stricter standards than electronic voting machines.
I've noticed that whenever a story that is likely to be viewed as favorable by most Slashdot users and it pertains to Democrats, the label is prominently displayed. However, when there's one that would be viewed negatively, it's hidden. This article for instance. There's not one single mention of Massachusetts House Speaker Robert DeLeo's party affiliation. By the way, he's a Democrat. I'm not a D or a R (I'm more libertarian than anything else), but I just find the duplicity on this site frustrating.
Taking guns away from the 99% gives the 1% 100% of the power.
I would actually argue it is more of a "stupid tax" but I also feel that way about most forms of gambling.
Participating in a lottery is not necessarily a "stupid" proposition, depending on the circumstances. I'm also not talking about cases where the payout of a particular lottery is great enough that the expected value of a lottery ticket is greater than the cost of a ticket. I'm speaking more to the personal utility of a particular sum of money (let's call it f(x), where "x" represents a sum of money, and the result is the utility of that sum of money). For a particular person, that function is most likely not linear. In other words, f(2x) is not necessarily 2f(x). For many people, f(lotto payout)/f(cost of ticket) can be many times greater than (lotto payout)/(cost of ticket). Given a sufficient level of this, the expected utility value of playing the lotto may end up being larger than the cost of the ticket, even if the expected dollar value of playing is still less than the cost of a ticket.
I suppose that you could try and argue that people whose utility function of money is not linear are "stupid," but I would argue that not taking into account the utility a particular sum of money would give you would be the "stupid" move.
To further expand upon this point, let's take a reverse case. Suppose I offered you a $1,000 ticket with billion-to-one odds (10E9) that paid 1 quadrillion dollars (10E15) if you won (and you were only allowed to buy one ticket). The expected value of the ticket is $1,000,000, so the odds should indicate you would take that offer. I would imagine that most "smart" people, if given that opportunity, would not take it, because their expected utility value of playing would actually be lower than the utility value of $1,000.
Note to self: Stop putting jokes in my insightful comments so I can get something other than +1 Funny!