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The celebrations seem short lived now that the online gambling industry is attempting to digest the bill introduced by Congressman Barney Frank.  Certainly the industry considers it a step forward and is excited about the prospect of online casinos being legalized in the United States; however, the tax measures being proposed by Barney Frank and Jim McDermott have caused a few eyebrows to rise. 

According to the bill, online casinos will be taxed two percent of gross revenue and all winnings will be taxed as income.  This is causing a few online casinos to be apprehensive and the scenario seems to replicate what happened when the United Kingdom first proposed legislation to regulate online casinos.

When online casinos were being regulated in the United Kingdom, the industry celebrated until they read the fine print.  Online casinos were disappointed when, then Chancellor of the Exchequer, Gordon Brown established such unreasonable tax rates that no one wanted to apply for an operators license.

The bill has not yet been debated and no compromises have yet to be considered but many online casinos are already disappointed that they are not being taxed on profits as opposed to total intake.  Gamblers that visit online casinos frequently are wondering how the new tax will affect their personal income taxes.  Some players are actually opposed to government regulations.

“Bureaucrats will drain the excitement from the games, taking so much money for tax that players will leave the sites,” said Tommy P., a regular online casino gambler.

“After all, what's the worst return in all of gambling? The state-run games, like lotteries. Government gambling is the one type of gaming that truly fits the picture of evil, oppressive gaming beating down the average guy.”

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