Taxes – Internet Poker

The Bush Administration tried to kill internet poker and failed. No surprise there. Betting on internet poker may be coming back because taxes on it are now being considered.

The Bush Administration clearly felt that our young men and women were mature enough to go and die in wars. Interestingly, the administration didn’t feel these same people or, for that matter, you and I were mature enough to play internet poker and bet on it. In a classic congressional move, the Bush Administration had a rider added on to the Unsafe Harbors Act that had the practical effect of eliminating the betting on online poker. The provision didn’t outlaw it, but it did bar banks and credit card companies from processing payments to the online sites.



Whether you agree or disagree with the ban, the tactic was pure government control. This sounds very Orwellian, but it isn’t necessarily. Government does this all of the time. Consider smoking. The government can’t ban it outright so it instead tries to get us to quit by raising taxes on a pack of cigarettes. The higher the cost, the less we will smoke supposedly. The same goes with retirement. Nobody can count on Social Security so the government gives us tax incentives if we invest in 401k, IRA or Roth IRA plans. People complain about Big Brother, but Big Brother has been here for a long time!

The Democrat majority in the legislative and executive branches of government have been slightly active as you may have noticed. Whether you agree with their actions or not, there is no argument they are spending money like a drunken sailor on shore leave. The fact these programs have to be paid for is starting to become very evident and here is where internet poker may be revived.



A few bills are now in front of Congress that would seek to overturn the rider in the Unsafe Harbor Act. These bills are all a bit different, but the basic idea is to allow people to bet on internet poker again. Of course, we will have to pay taxes on the winnings as will the sites that provide the games. This means revenues, a much needed thing in Washington, D.C., these days.

So, when will we see betting on internet poker again? Given the lack of revenue from traditional taxes these days, the change can’t be very far off.

<< Back to Internet Taxes