Rep. McDermott re-introduces 12 percent online gambling tax

Rep. Jim McDermott (D-Wash.) on Thursday introduced "The Internet Gambling Regulation and Tax Enforcement Act of 2013" in the House of Representatives. Under the proposal, operators, not players, would pay a 12 percent deposit tax, including four percent to the federal government and eight percent to qualified states and tribes, depending on the location of the player making the deposit.

The bill, which coincides with legislation introduced earlier this year by Reps. Pete King (R-N.Y.) and Michael Capuano (D-Mass.) to federally regulate Internet gambling, has the backing of The Safe and Secure Internet Gambling Initiative.

"With all of the fighting in D.C. over funding issues, you'd hope this opportunity to generate billions in economic activity and new government revenues will get serious consideration, not to mention the many new jobs that would be created," said Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative. "With the pending Internet gambling bills, Congress can put in place broad consumer protections and capture significant new government revenues without having to raise taxes. It's shocking that Congress has decided to leave in place hypocritical laws that allow some forms of online gambling activity, such as betting on horse racing, but prohibits others, like poker and bingo. You'd be hard pressed to find another industry pleading for a chance to offer online the same activities permissible offline, and be taxed fairly to do so."

McDermott introduced similar legislation in 2009 and again in 2010 that would tax Internet gambling in the U.S., then a companion to legislation introduced by former Rep. Barney Frank that would federally license and regulate online gambling.