US Government’s Stance on Gambling Is All About Taxes

Posted By: Date: 01/14/2011 at 12:00 am Leave a comment

The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006, and finally received its regulatory guidelines in the summer of 2010. The US government continues to maintain that online gambling is illegal within its borders. So why is it that Americans are being asked to pay taxes on their winnings from internet gambling?

Sure, gambling winnings have always been a taxable resource for Americans, but why should the government wish to tax an illegal source of income? It doesn’t seem to make sense that they would avoid arresting those who gamble over the internet if they are certain that the individual has received income in such a manner, but choose only to demand their portion of those profits instead.

One online poker player, who wishes to remain anonymous, said “It bugs me every year when I fill out my tax forms that I will be giving the government a good chunk of my winnings. They tell me I should not be playing poker online, but they have no problem taking my hard earned money. It’s a joke.”

The hypocritical stance of US legislators may be starting to catch up to them. A number of state representatives, like Barney Frank of Massachusetts, have spent many hours of their political office trying to unravel what the US government so tactlessly threw into effect back in 2006 (the UIGEA) so that the online gambling industry could become a legitimate source of tax revenue for the country. Now that the criminalization has become more of a stately issue, it seems that fans of online gambling may finally get their way.

New Jersey just passed a bill last week to legalize online casino gambling, and is merely waiting for Governor Chris Christie to put his autograph on the legislation before it goes into effect. Other states, including California, Florida and Iowa, are expected to follow suit in the near future.

If Americans are expected to pay taxes on their online poker, casino, bingo and sports betting accounts, it only makes sense that they should not be unprotected by government licensing and regulations. The United States stands to earn billions in tax revenue, not just from players, but especially from the licensing fees, should the nation decide to decriminalize the activity of gambling online.

At the moment, online gamblers do not face penalty for placing wagers over the internet from the US government. Only the financial institutions that transfer monies to/from online gambling sites from Americans are subject to penalty. Online gambling laws placed against participants are maintained on a state level, and considering that the house will be Republican-led for at least the next two years, it may be up to each individual state to determine the fate of its citizens in terms of legal or illegal online gambling in the US.

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