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Copyright © 2006 Reuters
HEADLINE: Internet
poker could net US billions in tax-study
Body:
Regulating Internet
poker could bring the U.S. government some $3.3 billion in
taxes annually, according to a study to be released on Tuesday,
ahead of an expected debate over legislation to ban online
gambling.
Income taxes on winnings from Internet poker alone -- which is
estimated to have attracted $60 billion in wagers worldwide in
2005 -- could amount to $2.5 billion each year, according to the
study commissioned by the Poker Players Alliance, a group calling
for the regulation of online gambling.
"The majority of the revenue that's generated would be from
reporting of poker winnings," said Michael Bolcerek, president
of the group.
The study also said that a 1 percent user fee on online
poker transactions would generate another $800 million to
$1 billion in revenue per year for the U.S. government.
The U.S. Justice Department says a 1961 law that forbids interstate
telephone betting also applies to the Internet, making it illegal
for the industry to do business in the country.
Authors of a bill expected to be debated in the U.S. House of
Representatives on Wednesday, say their legislation would clarify
that point for prosecutors. It would also prohibit gambling businesses
from settling Internet wagers with credit cards, checks or fund
transfers.
Among Web sites used by U.S. players to gamble are those run
by UK-listed companies such as Party Gaming Plc (PRTY.L: Quote,
Profile, Research) and 888 Holdings (888.L: Quote, Profile, Research).
The Poker Players Alliance says the fees and taxes that would
come with regulation could deter some people from playing online,
but Bolcerek said legalizing online poker would still lead to
an increase in the number of players and revenue.
The Internet poker market is projected to grow 15 percent to
20 percent a year, according to the study.
"The reason why poker hasn't exploded as rapidly as it probably
could have is because there is this overhanging legal question,"
Bolcerek said. "Once you remove that barrier ... that's going
to more than compensate for any potential negative effect of people
not playing the game because they are being taxed."
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