Rep. McDermott Introduces Bill for Tax Mechanism for Frank Legislation

Rep. Jim McDermott (D-Wash.) introduced the Internet Gambling Regulation and Taxation Enforcement Act (IGRTEA) today, just hours after Rep. Robert Wexler (D-Fla.) announced he would introduce a bill amending the Unlawful Internet Gambling Enforcement Act (UIGEA).

McDermott’s measure would create a tax regime for U.S. online gambling companies expected to generate $6-$25 billion in U.S. tax revenues in its first five years of enactment, according to the representative’s press office.

The bill is meant to serve as the tax mechanism for Rep. Barney Frank’s (D-Mass.) Internet Gambling Regulation and Enforcement Act (IGREA) and could possibly be discussed along with other U.S. Internet gambling legislation during tomorrow’s House Financial Services Committee hearing at 10 a.m.

McDermott is slated to introduce the bill on the house floor this evening, according to spokesperson Mike Decesare, but he was unable to confirm whether the legislation will officially be a part of tomorrow’s hearing proceedings.

Rep. Robert Wexler’s Skill Gaming Protection Act calls for a skill-game exemption (poker, Mah jong, chess, bridge, backgammon) to the UIGEA and the Wire Act. The UIGEA makes it illegal for financial institutions to allow U.S. consumers to make transactions with Internet gambling companies, while the Wire Act make it illegal to make or accept sports bets using a wired communication device.

Frank’s legislation calls for replacing the UIGEA with legislation that allows Internet gambling companies to operate in the U.S. in a regulated environment. Wexler is trying to separate games of skill from games of chance.

In another attempt, Rep. Shelley Berkley (D-Nev.) introduced legislation this spring that calls for a one-year study of the effects online gambling would have on the U.S. market.