By
Dan
The online poker world was buzzing on Wednesday with the news that Congressman Jim McDermott (D-WA) had introduced legislation that would allocate up to $40 billion over the next decade to provide educational and job training assistance to current and former foster care participants as well as people in declining job sectors. How does this affect online poker, you ask? Great question! The $40 billion in revenue won’t come from existing taxes or even increasing the federal deficit. Instead, the new relief will come from federal taxation of internet gambling, if and when the industry is allowed back into the United States.
The bill, HR 6501, known as the Investing in our Human Resources Act of 2008, was formally introduced by Congressman McDermott on Wednesday. It gives new and important opportunities to two critically underserved populations – those in foster care and those in what a letter from McDermott describes as “old-economy jobs.” Up to $40 billion will be allocated for these groups from internet gambling. The letter continues: “Revenues generated by internet wagers that are legal and regulated would be deposited into a newly-created Transitional Assistance Trust Fund. Money from this trust fund would be made available to states and territories based on population.”
McDermott disseminated a letter to his colleagues this week encouraging them to become co-sponsors of his legislation. He’s already received two takers: George Miller (D-CA) and John B. Larson (D-CT). Poker Players Alliance Executive Director John Pappas talks about the organization’s stance on the new legislation, which is now in its nascent state: “McDermott is on the tax writing committee in the U.S. House of Representatives and he’s been an advocate for extracting revenue from internet gambling. The PPA hasn’t had an opportunity to review his proposal thoroughly, but we like the out-of-the-box thinking to be able to connect the benefits of legislation to a worthy cause. This is all stipulated on the idea that a Barney Frank-style bill would be passed.”
The latter part of Pappas’ quote is critically important. HR 6501 doesn’t call for any framework to legalize and regulate internet gambling. Instead, it offers up tax revenue from the internet gambling industry whenever Congress chooses to legalize it. Congressman Barney Frank’s (D-MA) HR 2046, the Internet Gambling Regulation and Enforcement Act, was introduced on April 26, 2007 and currently has 48 co-sponsors from around the country. It establishes a framework for licensed and regulated internet gambling in the United States and is the basic bill that would have to be passed in order for McDermott’s new legislation to come to fruition.
The two original co-sponsors of HR 6501, Miller and Larson, are big guns in Washington. According to a press release distributed by the Safe and Secure Internet Gambling Initiative, “Rep. Miller is a member of the Democratic Leadership and chairman of the House Democratic Policy Committee. Rep. Larson serves as vice chair of the Democratic Caucus and assists in organizing and running the Democratic Caucus.” Initiative spokesperson Michael Waxman commented to PocketFives.com, “What we have here is a clear statement that a move to regulate internet gambling will not be stopped despite what many people have perceived as a setback in the latest House Financial Services Committee vote.”
Last month, HR 5767, the Payments System Protection Act, was struck down in the House Financial Services Committee. It would have suspended the enforcement of the Unlawful Internet Gambling Enforcement Act (which was enacted into law in 2006) until clear definitions that spelled out what was illegal and what was legal under the UIGEA could be determined. An amendment by Congressman Peter King (R-NY) that would have called for the United States Treasury and Federal Reserve to work together to determine what the UIGEA meant was defeated by virtue of a 32-32 tie vote. HR 5767 was then promptly defeated after a verbal vote. It marked a disappointing end to a promising piece of bi-partisan legislation.
Pappas explains the importance of internet gambling providing a brand new source of revenue for the United States: “In an era where Congress is seeking revenue to pay for other priorities, such as job training, this is a welcome bill. We hope that Congress has the courage to act this year to do something. However, we think that we’re in a great position in 2009.”
The end of the 2008 Congressional session is swiftly approaching. Any legislation currently not acted upon has to be re-introduced in 2009, when the new Congress will take over following the November general elections in the United States. The entire House of Representatives (including Frank and McDermott) are up for re-election, as is one-third of the Senate.