Question by Discipulo legis, quis cogitat?: What are all the online gambling fans in America going to do when congress passes the new bill?
From what I understand, online gambling is already illegal but impossible to enforce. What will happen when it becomes illegal for American banks and credit cards to transfer money to gambling websites? And also, do online betters report their earnings on their taxes? Has anyone who has made money with online gambling gone to prison for income tax evasion?
Answer by Lenny B
First of all, the Senate is unlikely to pass a bill this year so it is unlikely that the bill passed by the house will become law. If they do not pass it before this Congress finishes it work, they have to start the process all over again with the new Congress.
Also, your assumption that online gambling is already illegal is partly true and partly false. The Department of Justice has been fueling a campaign of misinformation over the last few years. Sports betting is in fact illegal, that is true. It was covered by the 1961 wire act. Blackjack, poker, slots, bingo, etc. are a different story. A federal court ruled in 2002 that when the wire act was created there is no way that it could have been intended to cover the internet. They felt that no one in 1961 could have conceived the notion of playing blackjack either over a phone line or some other wire device. They did believe that the law did cover the use of phone lines for sports wagering though, as that was common practice at the time.
The online gambling sites will most likely find some way around any attempt to cut off their banking options. There have been attempts to curtail the use of credit cards in the past and the industry has adapted.
As for taxes, all online betters with wins should report those wins on their taxes. While I do not know of any case of player going to prison for tax evasion, that does not change the fact that the USA demands that citizens pay taxes on their entire worldwide income.
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