Sen. Menendez Unveils Online Poker Bill

[Jeepster80125 0]

linkSen. Robert Menendez, D-N.J., introduced legislation Thursday that would allow federally-regulated online poker and other games of skill. The bill is designed to raise revenue while protecting families through a crackdown on predatory Internet gaming sites that target minors and fleece their customers. A 2006 law banned most forms of Internet gambling in the United States and some members have been trying to get the statute repealed or significantly modified.Under the Menendez bill, gaming companies would have to undergo a thorough review by the Treasury Department including an analysis of the financial condition of the applicant, business record, and background checks. In addition, an applicant must submit a full financial statement, corporate structure documentation, and a certification that the applicant agrees to be subject to U.S. gambling laws. The Treasury could deny licenses for any firm believed to not meet the criteria set by the government. The measure proposes a license term of five years and renewal would be subject to the same requirements.The Treasury would be directed to develop guidelines for ensuring age verification and that bettors are physically located in a jurisdiction where gambling is legal. The agency would also have to ensure all taxes due are collected. Further, there are requirements to combat fraud, money laundering and compulsive gambling and to ensure games are fair and bettors' privacy is protected. Licensed sites would have to pay a 10 percent tax on all deposits into playing accounts, the proceeds of which would be split evenly between the federal government and the government of the state where the player is located."Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families," Menendez said in a press release. "By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times." Estimates have shown that more than $3 billion in annual revenue can be raised by licensing and regulating Internet poker, according to his office.The Poker Players Alliance lauded Menendez's measure. "The tides are turning and support for licensing and regulating Internet poker versus infringing on Internet freedom is growing," PPA chairman and former Sen. Alfonse D'Amato said in a statement. A spokesman for the Safe and Secure Internet Gambling Initiative said the bill is a "move in the right direction" but the group believes a regulated environment should be broadened to allow wagering on poker along with other games. House Financial Services Chairman Barney Frank has proposed such a bill.

[JSpencer 0]

linkSen. Robert Menendez, D-N.J., introduced legislation Thursday that would allow federally-regulated online poker and other games of skill. The bill is designed to raise revenue while protecting families through a crackdown on predatory Internet gaming sites that target minors and fleece their customers. A 2006 law banned most forms of Internet gambling in the United States and some members have been trying to get the statute repealed or significantly modified.Under the Menendez bill, gaming companies would have to undergo a thorough review by the Treasury Department including an analysis of the financial condition of the applicant, business record, and background checks. In addition, an applicant must submit a full financial statement, corporate structure documentation, and a certification that the applicant agrees to be subject to U.S. gambling laws. The Treasury could deny licenses for any firm believed to not meet the criteria set by the government. The measure proposes a license term of five years and renewal would be subject to the same requirements.The Treasury would be directed to develop guidelines for ensuring age verification and that bettors are physically located in a jurisdiction where gambling is legal. The agency would also have to ensure all taxes due are collected. Further, there are requirements to combat fraud, money laundering and compulsive gambling and to ensure games are fair and bettors' privacy is protected. Licensed sites would have to pay a 10 percent tax on all deposits into playing accounts, the proceeds of which would be split evenly between the federal government and the government of the state where the player is located."Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families," Menendez said in a press release. "By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times." Estimates have shown that more than $3 billion in annual revenue can be raised by licensing and regulating Internet poker, according to his office.The Poker Players Alliance lauded Menendez's measure. "The tides are turning and support for licensing and regulating Internet poker versus infringing on Internet freedom is growing," PPA chairman and former Sen. Alfonse D'Amato said in a statement. A spokesman for the Safe and Secure Internet Gambling Initiative said the bill is a "move in the right direction" but the group believes a regulated environment should be broadened to allow wagering on poker along with other games. House Financial Services Chairman Barney Frank has proposed such a bill.

Not sure how this will be handled.Will the poker site cover the extra 10% or will it be deducted from the new players deposit? Seems like it could be trouble.Don't most poker sites already pay like 10%+ to the payment processors? If that's the case would this save them money?Will be interesting to see how this works out.

[I_fold08 1]

step in the right direction, but nothing is happening anytime soon

[Mercury69 3]

I think poker sites will simply say "No way" to this. They will not want to take ownership of background financial checks of applicants, nor will they be willing to take on all the additional administration involved, not to mention the 10% "tax" will make them the "bad guy". Being that most sites are "offshore", this bill will virtually be unenforceable. Perhaps if the US government set up an independant body through which background checks and approval processes could be made and accepted, as well as maintaining a database of approved individuals, this might fly. As it is, preventing any misuse of approved accounts is another thing entirely.Frankly, I think it's a short-sighted bill and Menendez will go down hard for wasting people's time with it.

[bbgun 0]

I think poker sites will simply say "No way" to this. They will not want to take ownership of background financial checks of applicants, nor will they be willing to take on all the additional administration involved, not to mention the 10% "tax" will make them the "bad guy". Being that most sites are "offshore", this bill will virtually be unenforceable. Perhaps if the US government set up an independant body through which background checks and approval processes could be made and accepted, as well as maintaining a database of approved individuals, this might fly. As it is, preventing any misuse of approved accounts is another thing entirely.Frankly, I think it's a short-sighted bill and Menendez will go down hard for wasting people's time with it.

The way the article reads, the poker sites themselves are the "applicants".

[Mercury69 3]

The way the article reads, the poker sites themselves are the "applicants".

reeding skillz r my frined.Quite right. That 10% tax is gonna be a bitch, however. What, exactly, will the "proceeds" be used for? Is this a thinly disguised money grab? I'm thinking the sites, if they go for it, will probably raise their rake, making them less desirable to play on.

[I_fold08 1]

The way the article reads, the poker sites themselves are the "applicants".

where have you been

[bbgun 0]

where have you been

Had my kids for a couple of months for the summer...

[CaneBrain 95]

reeding skillz r my frined.Quite right. That 10% tax is gonna be a bitch, however. What, exactly, will the "proceeds" be used for? Is this a thinly disguised money grab? I'm thinking the sites, if they go for it, will probably raise their rake, making them less desirable to play on.

I think the big 2 (FTP and Stars) make so much money that they might pay the 10% for the peace of mind of knowing that they can do business in the USA free and clear. This could also get PartyPoker back into the USA which would be nice.The government wont let you do anything without paying the toll first.

[Suited_Up 2]

reeding skillz r my frined.Quite right. That 10% tax is gonna be a bitch, however. What, exactly, will the "proceeds" be used for? Is this a thinly disguised money grab? I'm thinking the sites, if they go for it, will probably raise their rake, making them less desirable to play on.

Everything is a money grab. But this will bring in a lot of extra players. And rake won't go up... it'll be even more competitive than it already is. They can't alienate the precious millions of extra players by trying to up the rake.They make enough to pay 10% and still print money.

[aucu 3]

The way the article reads, the poker sites themselves are the "applicants".

Background checks and accountability would probably be similar to what the sites and management had to do to get listed on the London stock exchange. 10% deposit tax? it's coming out of the rake how ever you look at it, no way will a site get much action if they take it off the top. 10% of rake would be more like it but how would you split that up between state and fed?

[tbrick412 0]

having access to the united states markets will drop transaction costs for cashouts and deposits so much that it will be a wash. the 10% only applies to every deposit, not cashout. one thing is that this bill allows for any state to opt out. i doubt there is any chance states like kentucky, texas, etc let this bill see the light of day in their state. also it will make online poker age 21+ everywhere.

[StrippersNBlow 0]

I think that 10% is a bargain to get sites back in with the general american public, who have been manipulated to think online poker is illegal. The initial bill to ban the processors never would have gone through if it wasn't piggybacked on a terrorism bill. Now with a democratic house and senate, I'm optimistic that there's a good chance it will go through. Overturn an unpopular decision AND make a few billion a year in taxes? Seems like a no-brainer, which is oddly enough why I think it may not pass.

[Suited_Up 2]

I think that 10% is a bargain to get sites back in with the general american public, who have been manipulated to think online poker is illegal. The initial bill to ban the processors never would have gone through if it wasn't piggybacked on a terrorism bill. Now with a democratic house and senate, I'm optimistic that there's a good chance it will go through. Overturn an unpopular decision AND make a few billion a year in taxes? Seems like a no-brainer, which is oddly enough why I think it may not pass.

Maybe they should slip the health care bill inside this one.

[StrippersNBlow 0]

Maybe they should slip the health care bill inside this one.

For a country full of religious zealots, it's funny to see so many willing to sacrifice the poor to save a few dollars. Piggyback that sucker!

[Balloon guy 158]

Of course they will also have to pay for the new insurance for the lawsuits they will face when they become a legal operating business in the US.Imagine the class action lawsuit that would have happened when Russ Hamilton and Freddie Deeb were found to be receiving money from the person with the super users account.But you guys all thought it would be good for internet poker to become legit

[JSpencer 0]

Well like I said...I'm pretty sure these sites already pay a % to the payment processors.So the 10% tax doesn't really make much of a difference.

[FCP Bob 1,321]

Much more likely for regulated online poker to be at the State level and not the Federal level. States have 90 days to opt out of the proposed Federal legislation even if it is passed and many States will opt out including those who don't like gambling plus ones like California which most likely will prefer to go it alone.http://www.capitolweekly.net/article.php?_....y6xraugth9puu0http://www.egrmagazine.com/news/industry/2...ling-laws.thtml

[FCP Bob 1,321]

Well like I said...I'm pretty sure these sites already pay a % to the payment processors.So the 10% tax doesn't really make much of a difference.

Even in a fully regulated environment payment processing will be expensive for the sites so any additional 10% tax on deposits will lead to a very large cost to a gaming site. People thinking that reduced rake will be a result of US regulation are dreaming in technicolor.William Hill and Ladbrokes have both announced that they are moving their online gaming operations from England to Gibralter because the cost in England is too high due to a similiar tax.

[looshle 6]

10% of deposits? wat?shouldnt it be like 10% of profit?

[FCP Bob 1,321]

10% of deposits? wat?shouldnt it be like 10% of profit?

Like any other business they'll have to pay corporate income taxes on profits. Basically the 10% is to ensure that the governments get their cut of the pie off the top. Since the main motiavation for legislators is to get revenue it makes perfect sense.All money in online gaming starts as a deposit.Out of those deposits must come:1. Withdrawals back to players both winning ones and those who lose but withdraw less than they deposited.2. All of the expenses of running an online site from deposit fees to software development to marketing to all the expenses all businesses have.3. Profits of the site and taxes paid to governmentsAs you can see total deposits are far more than the revenues that a site will earn due to withdrawals back to players and also the money that stays in player's balances. A 10% tax on deposits will be more like a 25% tax on revenues off the top before expenses. For access to the American market that will still make business sense for companies but it will make it a much higher cost place to do business and as in any business it's the customer who will pay in the end.

[silkyjonson 1]

10% on all deposits or those coming from US consumers only?

[FCP Bob 1,321]

10% on all deposits or those coming from US consumers only?

What makes you think that people other than Americans are going to be allowed to play on US regulated sites ?

[zoo 0]

What makes you think that people other than Americans are going to be allowed to play on US regulated sites ?

Or would want to given the higher cost to play

[silkyjonson 1]

What makes you think that people other than Americans are going to be allowed to play on US regulated sites ?

So your saying Stars and FTP are going to pull out of other markets? Or are new online sites going to pop up? Obviously the taxation issue is complicated when dealing with sites that have players from all over the world.