If the US legalises online gambling it could provide revenue of between £3.1 billion to £15.2 billion in the first five years and between $8.7 billion and $42.8 billion over ten years in taxation to the U.S. government.

These are the findings of a tax revenue analysis by an independent accounting firm and should make U.S. politicians take note that legalising online gambling could be extremely beneficial to the country.

Democrat Representative Jim McDermott presented the findings to the House Committee and he also detailed his policy proposal, the Internet Gambling Regulation and Tax Enforcement Act.

Jim McDermott said, “Even under the most conservative estimates, licensing and regulating Internet gambling – and collecting the taxes that are due – will provide much needed revenue for the U.S. Treasury.

“This is money we are currently losing to other jurisdictions, for no other reason than some of my colleagues’ think we can actually stop people from gambling online.  It is money we will continue to lose if we ignore the fact that if grown adults in America want to gamble online, they can and they will.”

There is strong international pressure on the U.S. to legalise online gambling as several countries including the EU and Antigua, are seeking compensation as the Unlawful Internet Gambling Enforcement Act which effectively bans online gambling in the U.S., breaks a W.T.O commitment by the U.S.

The Internet Gambling Regulation and Tax Enforcement Act provides protection against tax cheating and therefore increasing tax revenue from permissible Internet gambling activity.  The act also proposes a new fee to be paid by the online gambling firm of two percent of player deposits.  The fee is designed to equalise the costs of operation in the provision of gambling services online as opposed to land casinos providing gambling services in-person, and it will only apply to online gambling firms.

Jim McDermott added, “To be clear, most of the revenues generated would come from taxes required under existing law that we currently lose because of a misguided belief that we can actually stop Internet gambling.  Specifically, these are not new taxes, but rather taxes on existing activity that is currently unregulated, unsupervised and underground.”

McDermott’s Internet Gambling Regulation and Tax Enforcement Act is a follow-up to the Internet Gambling Regulation and Enforcement Act forwarded by fellow Democrat Representative Barney Frank.  The act proposes a licensing and enforcement framework for regulating legal online gambling in the U.S.

The online gambling industry will wait with baited breath to see if the U.S. decides to legalise online gambling.  With the Bush administration coming to an end, there is hope a new administration will change the gambling law and some observers believe with the international pressure, it could happen even sooner than that.