Not in the cards: Wyden pulls gambling tax amendment

Sen. Ron Wyden (D-Ore.) is withdrawing an amendment that would have legalized and taxed online gambling to help pay for healthcare reform.

In a statement to The Hill, Wyden’s communications director said Wyden did not want to introduce another controversial issue into the healthcare debate, and would pull his amendment from consideration.

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He had offered the amendment to the healthcare bill the Senate Finance Committee began considering on Tuesday. The provision would have taxed online gambling to pay for heath insurance subsidies.

“The last thing Sen. Wyden wants to do is make it more difficult to expand subsidies for working families by introducing a new contentious issue to the debate,” said Jennifer Hoelzer, his communications director. “So when he offers the amendment, he will do it with other funding mechanisms.”

While senior Democrats in the House also have offered support for the concept of taxing Internet gambling to pay for healthcare, the issue is unlikely to move forward.

The healthcare debate is already heated, and Democratic leaders in the Senate signaled they do not want to introduce another controversial issue to the mix.

“Changing the laws regarding online gaming is a significant detour from healthcare, a detour that Sen. Reid agrees is not appropriate at this time,” said Regan LaChapelle, a spokesman for Senate Majority Leader Harry Reid (D-Nev.).

However, Wyden’s proposal was praised by Internet gaming advocates and some House members, who said they would consider similar measures.

“Money’s money. If that’s the price we pay, that’s the price,” said Rep. Jim McDermott (D-Wash.). “I would consider adding it.”

McDermott is the author of legislation that would set up a system to insure and collect taxes on online gambling. It is a companion bill to one offered by Rep. Barney Frank (D-Mass.) that would legalize and regulate online gambling.

“It’s a great idea,” Frank said. “Why should we leave all that money untaxed?”

Frank, chairman of the House Financial Services Committee, said once his panel is done with reforming regulations governing the financial-services sector, he wants to bring his online gambling bill before the panel.

McDermott and other House Democrats could move to add the provision in conference, as members work to find a compromise between Democrats who want to provide generous insurance subsidies and those who want to control the healthcare bill’s costs.

Both Frank’s and McDermott’s bills have earned the backing of Internet gambling and entertainment companies as well as professional poker players. They say it is best to bring what has become an underground marketplace out into the open with consumer protections.

“We believe this makes sense. Congress should no longer allow tens of billions of dollars in new revenue to remain on the sidelines when it can be dedicated to increasing healthcare affordability for low-income Americans,” said Michael Waxman, a spokesman for the Safe and Secure Internet Gambling Initiative, a coalition of financial-services companies that are supportive of online gambling.

But conservative Christian groups argue legalizing online gambling will degrade family life.

“It is congressmen trying to take advantage of the situation,” said Tom McClusky, vice president of Family Research Council Action, which opposes legalizing Internet gaming. He said the tax on Internet gambling would be paid by gamblers who need help.

Professional sports leagues, such as the National Football League, also oppose legalizing and taxing Internet gambling.

An analysis by PriceWaterhouseCoopers shows an Internet gambling tax could garner $62.7 billion in new revenue over the next 10 years.

In addition, the U.S. ban on online gambling has met with international resistance. The European Commission released a report in June that said the U.S. prohibition on online gambling discriminated against foreign gambling operators, and the World Trade Organization has also ruled against the U.S. ban.

Frank’s bill has attracted 58 co-sponsors, including a few Republicans, such as Reps. Pete King (N.Y.) and Ron Paul (Texas). Frank’s bill would essentially repeal a law approved in 2006 as part of a port security bill.


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