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Debt Battle May Key Online Gaming Bill

Several legislators see online gaming as new tax revenue

Debt Battle May Key Online Gaming Bill

It was a contentious battle in July and August, one which pitted Republicans and Democrats, with the Tea Party thrown in. But in the end, a deal was struck so President Barack Obama could raise the debt ceiling and avoid default on U.S. bonds. But the deal wasn’t enough for rating agency Standard & Poors, which downgraded U.S. debt from AAA to AA+.

The deal creates a “super Congress”—a 12-member bipartisan commission—that will oversee more than $1 trillion in federal budget cuts. Congress will be asked for an up or down vote on those recommendations, without the ability to offer amendments, between Thanksgiving and Christmas later this year.       

Online gaming advocates see an opening in this commission. They see an opportunity to create new revenues by taxing the new activity of online gaming. Congressman Jared Polis (D-Colorado) supports online gaming taxation, as well as placing levies on legalized medical marijuana and other activities.

Polis’ numbers may be off, however. He says the Congress can raise $42 billion over the next 10 years in taxes on internet gaming. But according to GamblingCompliance, that calculation assumes all 50 states opting into the activity. The Joint Committee on Taxation says the true figure is more like $10 billion over that period.

“It’s not a take-it-or-leave-it proposition,” Polis spokesman Chris Fitzgerald told GamblingCompliance. “Congressman Polis is just trying to get people to think outside the box when it comes to raising revenue without raising taxes.”

Polis is a co-sponsor to three online gaming bills already introduced into the house by Reps. Joe Barton, John Campbell and Jim McDermott.

Some doubt, however, that the revenue garnered from online gaming would make a dent in the national debt.

“The national debt is more than $14 trillion,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada at Las Vegas. “Revenue from gambling would probably keep the country running for about five minutes.”

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