[Congressional Record (Bound Edition), Volume 159 (2013), Part 12]
[Extensions of Remarks]
[Page 17165]
[From the U.S. Government Publishing Office, www.gpo.gov]




INTRODUCING THE ``INTERNET GAMBLING REGULATION AND TAX ENFORCEMENT ACT 
                               OF 2013''

                                 ______
                                 

                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                      Thursday, November 14, 2013

  Mr. McDERMOTT. Mr. Speaker, I rise today to introduce the Internet 
Gambling Regulation and Tax Enforcement Act of 2013. This bill would 
generate new streams of revenue for the federal government as well as 
state and tribal governments, create an estimated 30,000 new jobs in 
America, and provide funding for children in foster care and for 
historic preservation and the arts. This is a companion bill to H.R. 
2282, legislation sponsored by Cong. Peter King and Capuano, which 
would license and regulate online gambling at the federal level. Under 
current law, intra-state online gambling is legal, but inter-state 
online gambling is not, except for betting on horseracing, which is 
legal on an inter-state basis.
  Under my legislation, the federal government along with state and 
tribal governments would recognize a new, untapped stream of revenue. 
The revenue could help jurisdictions fund needed services at a time 
when many governments are struggling with tightening budgets.
  Online gambling operators would pay a tax to the federal government 
as well as state and tribal governments equal to a percentage of the 
total deposits they collect. The money paid to the governments would 
not be deducted from the accounts of online gamblers.
  Operators will pay a tax to the federal government equal to four 
percent of the funds deposited by players who reside inside the U.S. 
Operators will pay a tax to state and tribal governments equal to eight 
percent of the funds deposited by individuals residing within their 
jurisdiction. The deposits to state and tribal governments would be 
made automatically every month by website operators, in lieu of them 
(the governments?) imposing other taxes of their own. This deposit tax 
for states and tribes would be an optional, simple, and uniform way to 
participate.
  A quarter of the revenue raised by the bill would go to providing 
assistance to the nearly 500,000 children in America who live in foster 
care. The funds generated would be directed at helping foster children 
through grants to each State to carry out educational and transitional 
support for individuals who are or were in foster care.
  Finally, the bill sets aside 0.5 percent for historic preservation 
and the arts. I helped enact a similar program in my home state of 
Washington, and it has been hugely successful over the years.
  Some in this body may be concerned that legalizing online gambling 
would further open the door of the virtual casino to children, but 
evidence shows the current availability of online gambling options on 
the Internet has not led to an increase in gambling among minors. 
Moreover, technology is widely available and used in the United States 
and abroad to verify identity, age and location for online financial 
transactions from online banking to online gambling on horseracing.
  The future is happening. People in small towns and big cities across 
America are gambling online either legally under a patchwork of 
inconsistent state laws or illegally without any consumer protection. 
We have to deal with this issue. If we regulate online gambling, we can 
create jobs, generate revenue, and expand aid to children in foster 
care.

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