The online gambling world is evolving rapidly, and the US plays a significant role in this transformation. Recently, US lawmakers proposed a new framework for internet gambling. Developed by the , this proposal includes tax rates ranging from 15 percent to 25 percent and a ban on credit card deposits to create effective legislation across the states.
The proposed framework
Currently, seven US states—Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia—allow legal online casino games, while Nevada permits internet poker. The new framework was crafted through collaboration between lawmakers and gambling industry experts, such as former New Jersey Division of Gaming Enforcement head David Rebuck. He highlighted the proposal’s alignment with existing regulations.
Rebuck stated, “Ninety-five percent of this mirrors what we’re already doing in New Jersey, which is good. It’s a great start that builds on what is already in place and operational elsewhere.”
The proposed model suggests a tax range of 15 percent to 25 percent to encourage participation and ensure significant revenue for the states. This range aligns with the national average of 19 percent for online gambling, offering a balance compared to Pennsylvania’s high tax rates of 54 percent for online slots and 36 percent for sports betting events.
The proposal also includes a ban on credit card deposits to reduce the risk of gambling problems and excessive debts. It introduces deposit limits, with a maximum of $20,000 within 24 hours, and assigns some state regulatory agencies to oversee betting operations.
West Virginia delegate Shaun Fluharty emphasised its potential to alleviate state budget pressures while promoting responsible market practices. Fluharty said, “The thinking was we didn’t want to form a barrier to entry into the market with a high tax rate that only the biggest companies could afford.”
Challenges and successes in adoption
The new framework provides a solid foundation for states, but not all are ready to adopt it. Recently, Maryland’s attempt to pass new online gambling legislation was halted due to critical circumstances. New York’s proposal of a 31.5 percent tax rate faced criticism, suggesting it could discourage operators.
However, New Jersey’s thorough regulatory approach has set a benchmark for other states. By incorporating 95 percent of its framework, the proposal allows new adopters to leverage proven strategies. For instance, New Jersey generated over $414 million in tax revenue from online sports and casino betting last year, showcasing the economic benefits of regulated internet gambling.
Market experts predict a significant increase in legislative initiatives by 2025 as states consider online gambling to tackle fiscal challenges. The proposal offers a ready-made framework, streamlining the process of legalisation.
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