The key to getting online poker legalized
 

Let's be honest - there is a FAR greater chance online poker will be legalized if there is a way states and the US government can get direct tax revenues off it (beyond income tax on winnings). Fairness arguments will carry us only so far. We need to get greed on our side, and there is more than enough slush in the system to pay hefty taxes.

But how can things be structured to allow such tax revenues? The very factors that make it playable despite the law make it hard to tax. Kentucky can't pass a law that all online players in Kentucky have to pay a tax, or that Party Poker has to pay a tax proportionate to Kentucky dollars spent.

So how can government tax online poker, if legalized.

One argument is that if it were legal, US-based companies could enter the market, maybe take it over from PP and thus pay corporate income tax on all that rake. But I doubt that argument by itself will be enough - benefits are too far in the future and too uncertain in amount.

So how could state and federal governemnts tax online poker?

Re: The key to getting online poker legalized
 

Ummm... they already do through income tax. I think that gives the government more than its fair share.

On a related note, you're a democrat, right?

Re: The key to getting online poker legalized
 

Ummm ... I don't think offshore companies like Party Poker pay the US anything in income taxes.

On a related note, considering the intelligence of your reply, you're a republican right?

Re: The key to getting online poker legalized
 

Ummm...you pay income tax on your winnings, right. I think that is what his post implied. That as a law abiding citizen who makes money playing poker (income), the US gov gets a cut. If it were legalized and regulated, the gov could more easily get records of winnings/losses for calculating income tax an individual owes. Take the political slander to the politics forum.

Re: The key to getting online poker legalized
 

to be legalized, the government would probably tax the casinos as well... don't know if that's the right wording, but the casinos would pay the government. I believe this is how all the NV casinos do it (which is why there is no state tax)... Don't know where I heard it from and I can't believe it to NOT be true, but I believe US casinos are trying to get online casinos legal and regulated. I would assume how the online casino is taxed or whatever would be mainly based on how a B&M casino is taxed

Re: The key to getting online poker legalized
 

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to be legalized, the government would probably tax the casinos as well... don't know if that's the right wording, but the casinos would pay the government. I believe this is how all the NV casinos do it (which is why there is no state tax)... Don't know where I heard it from and I can't believe it to NOT be true, but I believe US casinos are trying to get online casinos legal and regulated. I would assume how the online casino is taxed or whatever would be mainly based on how a B&M casino is taxed

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Yeah, the government wouldn't be able to tax casinos/poker rooms that are based in other countries afaik, but they'd make a killing from American owned/operated/regulated sites.

Of course our B&M casinos would love to offer their poker & games to the public via the internet, but I really don't think this will happen in the forseeable future.

Re: The key to getting online poker legalized
 

Why would a online room move to the U.S. to pay a ton of tax?

Re: The key to getting online poker legalized
 

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Why would a online room move to the U.S. to pay a ton of tax?

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I don't think that's what he's saying.

He was thinking that legalizing it will encourage American entities already within the U.S. to start up online poker rooms.

Your question could be phrased why would ANY company in ANY market want to move to the U.S. No one does and companies move outside the U.S. for many more reasons than tax avoidance.

Re: The key to getting online poker legalized
 

What the gov't should do is this.

Make it legal for U.S. citizens to gamble at U.S. based online gaming sites and put ISP blocks on foreign gaming destinations. That way it guarantees itself the revenues it's looking for both by taxing the casinos and taxing the players.


Where would U.S. players feel safe gambling, CasinoGoogle or some skanky foreign country casino?

Re: The key to getting online poker legalized
 

Actually I'm a libertarian. As such, I hate like hell that I have beg and scheme and compromise to get governemnt out of an area that they have no moral right to be involved in. But I'm a practical libertarian, so I'm willing to do what it takes.

Private income tax isn't enough to make them legalize it, IMO (hence the phrase in my original post "beyond income tax on winnings"), since winners owe that anyway. If that were the only incentive, I think the argument would win that its better to direct gambling to b&m casinos where tax can be collected.

Re: The key to getting online poker legalized
 

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But how can things be structured to allow such tax revenues?

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A good place to start looking for tax revenues on online poker rooms is North Dakota's HB 1509 (bill to legalize online gambling within the state).

* 50k initial license fee
* 25k yearly renewal fee
* $10 per user license fee (for each player playing on a server located within NoDak, paid for by the licensee/poker room)

Tax structure
* 8% on 1st $1m
* 6% on 2nd $1m
* 4% on 3rd $1m
* 2% on next $5m
* 1/2 of 1% on next $50m
* 1/4 of 1% on any amount over $58m

And a forced contribution a 5% surcharge up to a remaining collection of $2m, to be used for a legal defense fund for NoDak to fight the Department of Justice, which was issued an "informational subpoena" to inform North Dakota that online poker was in fact, illegal and not tolerated by the DOJ. [This last forced surcharge was added to the bill after the DOJ sent the subpoena to NoDak's attorney general].

PDF link of HB 1509 text

Not a bad deal, as Gibraltar is charging Party 6% tax, while Britain's new gambling bill doesn't alleviate the 30% taxrate of online gambling sites...

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Why would a online room move to the U.S. to pay a ton of tax?

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Sportingbet/Paradise Poker's CEO Nigel Payne said Paradise Poker would relocate to NoDak if the internet poker bill passed, and was also a sponsor/gave testimony to the Senate panel reviewing the bill.

[edit]: Though such statements and appearances were more likely publicity stunts, knowing that nothing would be moved or changed as far as Paradise's server status until the legal question was fully answered, which would take years... [/edit]

I think it's quite forward-thinking to try and get in on the ground floor if online poker was legal in the US (ie-- clarified federal laws on status of online gambling as opposed to DOJ interpretations of wire act, and for that matter no official DOJ policy to harangue online poker-- either directly or indirectly by threatening legal action against 3rd party advertisers, banking groups, etc.)

That's the true fishpond: where a poker room can say it's regulated by the US gov't. And has a free hand to advertise such (imagine: no more Golden Palace forehead tattoos, tv and etc ads like London is drowning in right now.)

Further buoying occurs by the casinos that will rush to play as well (a large non-US based casino group is already sizing up its own online poker/casino offering)... and the WPTOnline site made available to US players...

Although, I hear Malta's a nice place to visit. [img]/images/graemlins/smile.gif[/img]

aK
GamesGrid Poker (and Backgammon!)

Re: The key to getting online poker legalized
 

I just don't think that just paying an additional personal or corporate tax on winnings or profits would sway the political powers that be to legalize online gambling. They hear too many sob stories about people who lost it all and ruined there lives by gambling from organizations like GA. They don't hear about all of the good things (including paying their salaries) that come from us already paying our gambling taxes.

There are additional taxes on alcohol and tobacco, and they ARE legal. But I don't think that additional tax revenue is the reason. I believe that the large tobacco and alcohol lobbyists have a great deal to do with it. Online poker players do not have a collective that speaks for our cause. In short, as individuals we have little clout.

From a corporate perspective, why would I, as a business owner, set up shop in a country where I would be taxed significantly more than I would anywhere else in the world just because I am doing business there? I certainly do not have an transportation costs, as my product can be "shipped" across the internet for almost nothing. So what does it matter where I am located? Relocating to the US would only hurt my business.

Re: The key to getting online poker legalized
 

AsiaKurosawa made some excellent points.

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Further buoying occurs by the casinos that will rush to play as well (a large non-US based casino group is already sizing up its own online poker/casino offering)... and the WPTOnline site made available to US players...

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Well, what about players in casino cardroom being handed poker cds to install when they get home? Perhaps the casinos could do some tie ins with some promotions, like using comp points for real money on a new poker account. The marketing advantages and cross promotional tie in possibilities alone will likely make up for the extra taxes a company has to pay.