Online Poker to Cause Mere Dent in Fiscal Cliff

December 3, 2012

The fiscal cliff, which will possibly lead to increase in taxes once the laws change, has been a debatable topic for the past few weeks. Ever since the exhilaration of the presidential election died down, the fiscal cliff and its effects on the next year is being discussed at length. In midst of this debate, the legalization of online poker has also been considered to reduce the fiscal cliff. However, experts claim that, although the possibility sounds plausible, it will not be a long-term solution.

Considerable Online Gambling Revenue Lost to Other Countries

One of the main issues that are emerging is the fact that the US is losing out on a significant amount of revenue due to an absence of an internet poker bill. More than $3.5 billion in a year is being wagered on poker sites across the world. There are several estimates that have put the figure close to $11 billion. However, financial consultants are of the opinion that this is a trivial figure when compared to the multi-trillion dollar debt faced by the US government.

The state of Nevada, also known as the casino capital of the world, has gone pro-active wherein its Gaming Commission is busy sanctioning internet poker licenses to reputed gaming companies. Some of them are Bally Technologies, International Game Technology, Boyd Gaming and South Point Poker. Although the companies are keen to offer online real money poker services, they would prefer that a federal internet poker bill is first instated in the country. The US state is undaunted by the fact that these licenses will not have any value if the online poker bill is not put into effect.

The online gambling industry is counting on the Nevada senator and sponsor of the bill, Harry Reid, to push the bill during the interim. At present, the only internet gambling bill existing in the Congress is the one proposed by Joe Barton. The Reid-Heller bill is yet to be introduced. The delay was primarily caused by scattered interests and later on the presidential elections. Although Reid is expected to give the bill the attention that it deserves, the senator has been honest in his admission that other matters, predominantly the fiscal cliff, will take priority in the 2013 session.

Touted Figures of Online Poker Revenue will be Insufficient; Pressure on Obama Administration

According to the estimate, an average of $50 billion can be earned over a decade by legalizing online poker in the US. What most people are unaware of is that this revenue will be subject to taxes. Corporate taxes will cut the revenue in half which will hardly be enough to save the US economy.

At present, it is only Nevada that has forged ahead; Industry experts say it is only a matter of time before the other states follow. Delaware is in the process of setting up a commission to accept licenses. While California was hyped to be one of the US states to offer internet gambling, efforts have died down. The point is that the Obama administration and the Congress will be under pressure to enforce a federal online poker bill once these states commence internet real money poker operations.

Although claims have been made that the legalization of online poker would only cause a mere dimple in the fiscal cliff, several sources have opined that it is one of the only possibilities at the moment. After the primary revenue generated from the licensing, the projected subsequent revenue will be a measly amount.

The online gambling industry is, however, waiting with baited breath to see whether there will be a last-ditch effort by Senator Reid to introduce the internet poker legislation in the lame-duck session. Sources say that the poker bill is one of the least important issues in the Congress today.

Internet Poker Bill Downplayed by Nevada Senators

In an effort to prepare the online gambling industry, Senators Jon Kyl, another sponsor of the bill, and Harry Reid have been downplaying the chances of the internet gambling bill in the past few weeks. Although Reid believes that the bill would result in a significant return of investment, which would not only benefit Nevada, but the country, there are few who would see it that way.

Supporters for the bill have argued that the legislation would result in innumerable job opportunities in the states that choose to offer real money internet gambling services. Critics, on the hand, have vehemently stated the threat to the country’s cyber-space as the primary issue.

Another issue raised was the possible increase in the number of gambling addictions and underage gambling if the bill is introduced and approved. Land-based casino owners and Indian tribes have long opposed the bill as it will adversely affect their businesses. The fiscal cliff, sources say, is another opportunity to garner attention for the online poker bill that seems to be dying a slow death.