Congress Moves to Dedicate $40 Billion in Internet Gambling Revenue for Job Training and Foster Care Programs

    Legislation's introduction shows continued support for Internet

gambling regulation



    WASHINGTON, July 16 /EMWNews/ -- Rep. Jim McDermott

(D-Wash.) introduced legislation yesterday that directs a potential $40

billion over the next 10 years to be spent on job training for those in the

declining sectors of the economy and educational assistance for foster care

youth. The legislation, Investing in our Human Resources Act of 2008 (H.R.

6501), would be funded through new revenue generated by regulated Internet

gambling activities.



    "We have an ideal opportunity to invest billions of dollars in American

workers and our struggling economy without increasing the federal deficit,"

said Rep. McDermott in speaking about the Investing in our Human Resources

Act (IHRA). "IHRA would utilize a funding stream that would become

available should Congress decide to legalize and regulate Internet

gambling, which would protect consumers and collect tax revenue that is

currently offshore."



    A provision in the legislation also encourages responsible Internet

gambling behavior and an awareness of unsafe practices, something which has

been praised by problem gambling advocates.



    "I believe that the McDermott bill could be a positive step to help

raise awareness about the dangers of unsafe gambling practices and the

availability of addiction treatment," stated the Executive Director of the

National Council on Problem Gambling Keith Whyte.



    In a sign that the legislation has support from key members of the

Democratic Congressional leadership, Reps. George Miller (D-Calif.) and

John B. Larson (D-Conn.) are original co-sponsors of the legislation. 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.



    Introduction of IHRA demonstrates the growing support in Congress to

regulate Internet gambling.



    "It is encouraging that Congress is seeking to regulate Internet

gambling and put the billions in new revenue to good use," said Jeffrey

Sandman, spokesman for the Safe and Secure Internet Gambling Initiative.

"We need to change the current path, where the prohibition of Internet

gambling allows for billions of dollars to be lost in an underground,

uncontrolled marketplace ripe for criminal exploitation."



    Revenues from regulated Internet gambling are estimated to be between

$8.7 billion and $42.8 billion over 10 years, according to a recent tax

revenue analysis prepared by PricewaterhouseCoopers. Through IHRA, these

revenues would be allocated annually to each state through a new

Transitional Assistance Trust Fund. A state would be entitled to receive

its allotment based on its percentage of the total population.



    To generate additional support for IHRA, Rep. McDermott circulated a

letter to all members of Congress. It includes a chart indicating projected

allocations of funding by state. A copy of the letter is available at

http://www.safeandsecureig.org/media/mcdermottdearcolleague-IHRA.pdf.



    Previously, a framework to regulate and ensure the collection of taxes

on Internet gambling activities was proposed in companion pieces of

legislation introduced by Reps. McDermott and Barney Frank (D-Mass.)



    The Internet Gambling Regulation and Enforcement Act (H.R. 2046),

introduced by Rep. Frank in April 2007, establishes an enforcement

framework for licensed gambling operators to accept bets and wagers from

individuals in the U.S. It would include a number of built-in consumer

protections, including safeguards against compulsive and underage gambling,

money laundering, fraud and identity theft. The legislation would also

reinforce the rights of States to control what, if any, level of Internet

gambling is permissible within their borders, including the ability to

apply additional taxes, and to ensure that appropriate consumer protections

and limitations were in place.



    Rep. McDermott's earlier bill, the Internet Gambling Regulation and Tax

Enforcement Act (H.R. 5523), would ensure the collection of taxes on

regulated Internet gambling activities. A revised version of the bill,

introduced in March 2008, includes an enhanced reporting mechanism under

which licensed gambling operators are required to provide each customer an

annual statement of winnings and losses. It also establishes a two percent

licensing fee that is paid by the operator, not the individual gambler. The

licensing fee is designed to equalize the costs of operation in providing

gambling services online, as opposed to brick-and-mortar casinos providing

gambling services in-person, and would only be applied to online operators.

    About Safe and Secure Internet Gambling Initiative



    The Safe and Secure Internet Gambling Initiative promotes the freedom

of individuals to gamble online with the proper safeguards to protect

consumers and ensure the integrity of financial transactions. For more

information on the Initiative, please visit http://www.safeandsecureig.org. The

Web site provides a means by which individuals can register support for

regulated Internet gambling with their elected representatives.