Federal Power Shapes Up To Online Casino Taxation

While some speakers at the hearing concerning online casino taxation before the House Ways and Means Committee oppose allowing online betting, even they said the issue should be resolved by the states.

While various positions were elucidated at today's House Ways and Means Committee hearing on Representative Jim McDermott's bill outlining taxation for online gambling, even those opposed to Internet gaming admitted the Federal Government probably shouldn't be deciding the issue. Bob Goodlatte, a Virginia Republican, said the need for money shouldn't outweigh negatives he sees in online gambling, but added the issue properly belongs to the states.

"People sometimes resort to drastic things when they are strapped for cash," said Bob Goodlatte. Still, he agreed with supporters of regulation that a federal ban is not the solution, saying states should be able to make their own decisions.

Barney Frank, the driving force in Congress for online gambling regulation, testified before the Committee that the issue involves more than figuring the best way to raise income for the government.

"We are talking about a decision by adults to do what they want to do with their own money," Barney Frank told the gathered legislators. He cited John Stuart Mills' famed essay "On Liberty" to remind the lawmakers of the principles underlying the US government.

While creating an estimated $42 billion in federal revenue already interested the most practical-minded Representatives, the larger issue of personal liberty became a hot topic, only one day after Tea Party voters had shown their contempt for big government at both Democratic and Republican primaries, ousting party favorites on both sides.

Recently, Rep. Goodlatte finally conceded issue a state affair at hearing, predicting, and writing about for years. In his website, he states:

"Under current federal law, it is unclear whether using the Internet to operate a gambling business is illegal. The closest useful statute currently is the Wire Act, which prohibits gambling over telephone wires. The Wire Act, which was written well before the invention of the World Wide Web, has become outdated. My legislation amends the Wire Act to make it clear that the prohibitions include Internet gambling and the use of other new technologies."

As the Constitutional limitations of federal power shapes up to be a major point of discussion in fall elections, online casino rights may become a symbol of the freedom to self-determine.