Things look to be moving forward in the US, with regards to an internet gambling bill. So far H.R. 2230 has been introduced to the floor and The Internet Gambling Regulation and Tax Enforcement Act – while not actually legalizing gambling online, formalizes a tax structure for the same activities, so is considered to be a step in the right direction. The Bill was introduced by Barney Frank, whom we know from the past to be pro online gambling; Jim McDermott (D-Wash.) and John Campbell (R-Calif.). Campbell and Frank are also currently known to be working on a bill for a legalized online gambling structure in the US.
The basic gist of the H.R. 2230 states that Internet gambling operations would be required to withhold tax in respect of net online winning and help the government to ensure that these taxes are collected. There would also be a 2% Federal Tax imposed on all deposits received monthly, while individual States would have the opportunity to tax local online gambling operations at an additional 6%. The Bill is also designed to require gambling companies to disclose any relevant information to the Government; which includes; names, addresses and tax ID numbers of all players. According to current US law – the IRS requires all gambling winnings to be declared, and a withholding tax to be paid of 28%.
Apart from the fact that the bill is structured to ensure tax collection takes place – online gambling operation would also require licensing. With regards to the 2% tax on all deposits, the Bill is very clear in the fact that this money should be paid by the company and not taken from the deposits of players. The bill would also send one quarter of the taxes collected to organizations for disadvantaged or for fostering children and the balance of two thirds are earmarked for general treasury coffers.Written by Neha A.