Know the Taxes of Online Gambling
Although online gambling is not technically legal in the United states, it is not explicitly illegal either. Many states have attempted to legalize online gambling so that they can benefit from tax revenue generated from the practice. However, there are often difficulties encountered by states attempting to legalize online gambling.
Each state does have the power to legalize or criminalize any type of gambling that is legally allowed by the federal government. However, Federal laws on online gambling are rather difficult to decipher. So far, the only form of online gambling that is explicitly illegal is gambling on out of state sports.
There are many arguments that support the legalization of online gambling. Casinos provide jobs and a big boon in the local economy. In addition, casinos provide tax revenue on both the state and Federal level. However, revenue from an online gambling winnings tax would far exceed revenue from the casino gambling winnings tax.
The online gambling winnings tax is expected to surpass revenue from the casino gambling tax based on past statistics on online gambling. The difficulties encountered by legalizing online gambling, however, make it difficult to implement. Those that take part in online gambling do enjoy a sense of anonymity. It is sometimes difficult to trace individuals online. It would also be difficult to verify the location of winners in order to impose the gambling winnings tax.
In addition, most credit cards will not allow Americans to purchase online gambling money with credit cards from the United States. In order for each state to enjoy the tax revenue from the gambling winnings tax, the Federal government would first have to make the practice legal. Once the basic laws are implemented, it would become easier to collect the tax revenue.
If the gambling winnings tax were applied to online gambling, each state would directly benefit from the revenue generated. In addition, the Federal government could also tax online gambling. Overall, online gambling currently represents an overall loss for each tax jurisdiction. Many gamblers chose to enjoy the anonymity of online gambling as opposed to going to the casino.
Those individuals represent a large amount of available tax revenue that is currently not being utilized in any tax jurisdiction in the United States. In fact, gamblers may choose online gambling as a manner of avoiding the gambling winnings tax. Those that chose to gamble legally are currently penalized by the gambling winning tax, while those that take part in online gambling, enjoy their winnings tax free. Contact tax lawyers for legal advice and assistance.
