How long until we play on Bellagio.com?

[dozer]

I read George Will's Newsweek article (here it is (http://msnbc.msn.com/id/15265338/site/newsweek/page/2/) in case you missed it in 20 other posts on 2+2).

Here's what stuck out to me, on page 2:


The problems—frequently exaggerated—of criminal involvement in gambling, and of underage and addictive gamblers, can be best dealt with by legalization and regulation utilizing new software solutions. Furthermore, taxation of online poker and other gambling could generate billions for governments.

THIS is our best shot to get online poker back and SAFE. Get it regulated int he U.S. and tax it. True, that would suck for those of us who skip paying taxes on our SNG winnings, but it would serve a lot of positives for our gov't (easy money being the key factor) while making it easier for us (and noobs) to play online.

Moreover, the casinos in Vegas would/should have a rooting interest since they could provide the places online for us to play. They may even be able to run such a site without taking in a significant amount of rake (especially if all forms of gambling would be legal). How huge would that be?

So if you're going to fight city hall on this, your argument is to legalize it in America and put it in the big gaming company's hands to market and regulate it. I couldn't imagine a bigger boost for our interests than these events falling into place.

[aces_full]

I think the big problem with your idea is that gaming in the US is regulated on the state level.

[LotteryOrPoker]

Online gambling revenue was $10 billion last year. That is revenue, not net profit. Figure out the net profit and multiple by .35. That would be the figure companies (depending on their actual profits), would pay in taxes on earnings. The annual federal budget is how many trillions of dollars? I don't think the federal government is overly concerned about the blip in positive tax revenue online gambling could create.

[Marc H]

[ QUOTE ]
Online gambling revenue was $10 billion last year. That is revenue, not net profit. Figure out the net profit and multiple by .35. That would be the figure companies (depending on their actual profits), would pay in taxes on earnings. The annual federal budget is how many trillions of dollars? I don't think the federal government is overly concerned about the blip in positive tax revenue online gambling could create.

[/ QUOTE ]


You CANNOT be SERIOUS!


The Gummint still ain't so big that it turns up its nose at any potential tax revenue numbering a BILLION (or more).

And why would it be a blip? why wouldn't be a steady stream every year?

[ADS]

First off, the number being circulated is 12Billion. Second, that figure DOUBLED in the last 12 months. Third, the U.S. accounts for at least HALF of that figure. If the growth is going to continue, this could bring in a nice chunk for the U.S. Government.

But the real issue is not how much taxes it brings, but hopefully the futility of trying to ban it alltogether and keeping the money (maybe illegaly) flowing to foreign interests as opposed to the local (U.S.) economy.

[Jeremy517]

[ QUOTE ]
I think the big problem with your idea is that gaming in the US is regulated on the state level.

[/ QUOTE ]

We still manage to have Powerball and Mega Millions.

[LotteryOrPoker]

[ QUOTE ]
First off, the number being circulated is 12Billion. Second, that figure DOUBLED in the last 12 months. Third, the U.S. accounts for at least HALF of that figure. If the growth is going to continue, this could bring in a nice chunk for the U.S. Government.

But the real issue is not how much taxes it brings, but hopefully the futility of trying to ban it alltogether and keeping the money (maybe illegaly) flowing to foreign interests as opposed to the local (U.S.) economy.

[/ QUOTE ]

Who gives a [censored] about whether revenue was $10 or $12 billion. Until you have shown me financial statements for EVERY online poker site, you estimate is no more credible than mine. Most estimates say that number is a 40% increase over 2004, not 100%. Either way, we are arguing symantics. What are the net profits off of $12 billion? So we don't argue symantics, they are definately less than $12 billion. So take 35% of that paid in federal income tax (assuming these sites would be willing to pay federal income tax in the US, since they are not based here), and you have a number that doesn't even register on most federal budget statements.

[ADS]

[ QUOTE ]
[ QUOTE ]
First off, the number being circulated is 12Billion. Second, that figure DOUBLED in the last 12 months. Third, the U.S. accounts for at least HALF of that figure. If the growth is going to continue, this could bring in a nice chunk for the U.S. Government.

But the real issue is not how much taxes it brings, but hopefully the futility of trying to ban it alltogether and keeping the money (maybe illegaly) flowing to foreign interests as opposed to the local (U.S.) economy.

[/ QUOTE ]

Who gives a [censored] about whether revenue was $10 or $12 billion. Until you have shown me financial statements for EVERY online poker site, you estimate is no more credible than mine. Most estimates say that number is a 40% increase over 2004, not 100%. Either way, we are arguing symantics. What are the net profits off of $12 billion? So we don't argue symantics, they are definately less than $12 billion. So take 35% of that paid in federal income tax (assuming these sites would be willing to pay federal income tax in the US, since they are not based here), and you have a number that doesn't even register on most federal budget statements.

[/ QUOTE ]

You are correct, we are dealing with estimates. And I will give mine regardless of whether YOU think it is accurate. My estimation is that the profit margins of ESTABLISHED ONLINE gaming companies are VERY high. Yes it is just MY estimation. And that the tax $ on this business would have run into the Billions if not this year within a couple. I believe I am being conservative here.

Second, you are not even relating to what I believe is the real issue at stake and that is draining of $ from the U.S. economy.

Third, in your estimation the government should say (or does say) to itself, "oh, it is only a $12billion industry that is growing between 40% (your number) and 100% a year. Peanuts, who needs it anyway?"

You are pretty smart.

[LotteryOrPoker]

Draining dollars from the US economy? PokerRoom's that are owned abroad, taking rake $$$ off of US players IS draining money from the US economy. This is a game symantics, because we are both on the same side. If you think that $1-4 billion/year means a lot to the US government in tax revenue you are wrong. The aid authorized by Congress for Hurricane Katrina victims was $62.3 billion, the war in Iraq has cost $378 billion, the military budget for 2007 is $462.7 billion, 2007 budget almost $3 trillion. So, yes, a couple billion in POTENTIAL poker site tax revenue means nothing.

You also need to take your $12 billion and subtract all operating costs, dividends and other expenditures before you end up with net income. Then take 35% of that number (for US based sites) and you come up with potential federal tax revenue from poker sites.

The government should not be able to dictitate how I spend my money if I am not harming anyone else. Our founding fathers would roll over in their grave if they knew about this intrusive bill, but the "taxation benefit" angle isn't going to work.

[otnemem]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
First off, the number being circulated is 12Billion. Second, that figure DOUBLED in the last 12 months. Third, the U.S. accounts for at least HALF of that figure. If the growth is going to continue, this could bring in a nice chunk for the U.S. Government.

But the real issue is not how much taxes it brings, but hopefully the futility of trying to ban it alltogether and keeping the money (maybe illegaly) flowing to foreign interests as opposed to the local (U.S.) economy.

[/ QUOTE ]

Who gives a [censored] about whether revenue was $10 or $12 billion. Until you have shown me financial statements for EVERY online poker site, you estimate is no more credible than mine. Most estimates say that number is a 40% increase over 2004, not 100%. Either way, we are arguing symantics. What are the net profits off of $12 billion? So we don't argue symantics, they are definately less than $12 billion. So take 35% of that paid in federal income tax (assuming these sites would be willing to pay federal income tax in the US, since they are not based here), and you have a number that doesn't even register on most federal budget statements.

[/ QUOTE ]

You are correct, we are dealing with estimates. And I will give mine regardless of whether YOU think it is accurate. My estimation is that the profit margins of ESTABLISHED ONLINE gaming companies are VERY high. Yes it is just MY estimation. And that the tax $ on this business would have run into the Billions if not this year within a couple. I believe I am being conservative here.

Second, you are not even relating to what I believe is the real issue at stake and that is draining of $ from the U.S. economy.

Third, in your estimation the government should say (or does say) to itself, "oh, it is only a $12billion industry that is growing between 40% (your number) and 100% a year. Peanuts, who needs it anyway?"

You are pretty smart.

[/ QUOTE ]
You can use as many estimates as you want. It just means you're not presenting a convincing argument.

[ADS]

[ QUOTE ]
Draining dollars from the US economy? PokerRoom's that are owned abroad, taking rake $$$ off of US players IS draining money from the US economy. This is a game symantics, because we are both on the same side. If you think that $1-4 billion/year means a lot to the US government in tax revenue you are wrong. The aid authorized by Congress for Hurricane Katrina victims was $62.3 billion, the war in Iraq has cost $378 billion, the military budget for 2007 is $462.7 billion, 2007 budget almost $3 trillion. So, yes, a couple billion in POTENTIAL poker site tax revenue means nothing.

You also need to take your $12 billion and subtract all operating costs, dividends and other expenditures before you end up with net income. Then take 35% of that number (for US based sites) and you come up with potential federal tax revenue from poker sites.

The government should not be able to dictitate how I spend my money if I am not harming anyone else. Our founding fathers would roll over in their grave if they knew about this intrusive bill, but the "taxation benefit" angle isn't going to work.

[/ QUOTE ]

Yes, we are on the same side. But I do feel the need to correct what is incorrect information.

Yes, you need to adjust for operating costs and other expenditures but NOT DIVIDENDS. Dividends are a distribution of income and they are AFTER TAX.

Being a CPA and a CFO, I can make estimates which are usually not far off base. An established online gaming company's expenses are not high in my estimation in relation to their revenue. Thus my estimate that their gross margin and profits are reletively high. The business model does not include inventory costs or cost for human services, but rather mostly for server costs. Of course there are other costs, payroll costs and software costs, but in general I am positive that for ESTABLISHED companies the gross margins are very high and net profits are very high. Now, a company in the growing stages, may spend alot on advertising and other marketing expenses, but this will result in even greater returns in the future.

[LotteryOrPoker]

What about advertising costs that are in the tens of millions, what about legal fees that are in the tens of millions? Did you forget these important facts in your "estimates?" They only spend a lot on advertisement in the "growing" stages? Is that why UB, Party and other sites are purchasing commercial advertisement time in the US? If you are a CPA, you would not be making these "estimates" with nothing to go on. You really have no idea what the operating costs are for a poker site. Furthermore, you sitll have not contradict what I said. You have only tried to play a game of symantics again.

[Shorty35]

The budgetary argument about taxation does not relate solely to the XX billion in revenue/net profit that the online gaming industry reports; it is a small piece. In fact, the majority of the argument is focused on the multiple of that number that is taxable income to PLAYERS.

For example, If I play a $100 HU sit and go and I win, I have $100 of income
(actually $95 because of the fee). But only the $5 entry fee is included in the "xx billion" industry number cited above in this thread. The numbers get very large and impactful if you assume that much of the $100 income is not reported by players now, but would be captured under an effective regulatory scheme.

[Synergistic Explosions]

[ QUOTE ]
[ QUOTE ]
I think the big problem with your idea is that gaming in the US is regulated on the state level.

[/ QUOTE ]

We still manage to have Powerball and Mega Millions.

[/ QUOTE ]

Dude, if you want some quick money, try the Iowa state lottery scratch tickets. Just move your mouse cursor over the tickets and discover how easy it is to win!

My bank even lets me fund the account easily and legally.

Thank god our state governments are in the business of online gambling.

[Guthrie]

"A billion here, a billion there, pretty soon it adds up to real money."

--Senator Everett Dirksen

[ADS]

Being a CPA, I understand that the online poker industry is not HIGH labor cost intensive, nor is it HIGH manufacturing cost intensive. Sure, they have other costs that are maybe higher than normal, such as advertising costs (which I brought up) and maybe legal expenses (which you brought up), but I do not believe that these costs are so high as to minimize their profit margins to such an extent.

Of course I don't have actual data of a poker site's operating expenses, but I don't see anything wrong with analyzing even if it involves simple estimates.

This was all a response to your "it is so small it means nothing" post. Mine was not meant as a post to show how huge the loss is to the U.S.

Also, the fact that the advertising is so strong for these companies, goes to show you the potential growth of an industry which is just in the beginning stages. If it were say, a $50 Billion industry, would your conclusions be different? It just may get there in a few short years.

As to your comment on how the $ drainage and tax revenues are so low, there are many industries which are much smaller in size, with MUCH less growth potential, does not mean that the government ignores them because they are such.

[LotteryOrPoker]

[ QUOTE ]
The budgetary argument about taxation does not relate solely to the XX billion in revenue/net profit that the online gaming industry reports; it is a small piece. In fact, the majority of the argument is focused on the multiple of that number that is taxable income to PLAYERS.

For example, If I play a $100 HU sit and go and I win, I have $100 of income
(actually $95 because of the fee). But only the $5 entry fee is included in the "xx billion" industry number cited above in this thread. The numbers get very large and impactful if you assume that much of the $100 income is not reported by players now, but would be captured under an effective regulatory scheme.

[/ QUOTE ]

And most of the small stakes players in B&M casinos do not report a $100 win. A lot of people who play online already report their winnings, especially if they play for a living. That argument on lost tax revenue really does not hold water. Do you think that every $100 win would be reported to the IRS? It is a safe assumption that IF online gambling WAS regulated you would get a W2-G on winnings of $600, $1200, $1500 or more depending on the game, bet, etc, just like at B&M casinos.

[LotteryOrPoker]

[ QUOTE ]
Being a CPA, I understand that the online poker industry is not HIGH labor cost intensive, nor is it HIGH manufacturing cost intensive. Sure, they have other costs that are maybe higher than normal, such as advertising costs (which I brought up) and maybe legal expenses (which you brought up), but I do not believe that these costs are so high as to minimize their profit margins to such an extent.

Of course I don't have actual data of a poker site's operating expenses, but I don't see anything wrong with analyzing even if it involves simple estimates.

This was all a response to your "it is so small it means nothing" post. Mine was not meant as a post to show how huge the loss is to the U.S.

Also, the fact that the advertising is so strong for these companies, goes to show you the potential growth of an industry which is just in the beginning stages. If it were say, a $50 Billion industry, would your conclusions be different? It just may get there in a few short years.

As to your comment on how the $ drainage and tax revenues are so low, there are many industries which are much smaller in size, with MUCH less growth potential, does not mean that the government ignores them because they are such.

[/ QUOTE ]

After reviewing this thread, the only conclusion that I can come to is that you are wrong. Congress knew exactly what the REVENUE from online poker was and still shut it down rather than tax it. So, they obviously don't a [censored], just like I said.

[Azizal]

[quote

After reviewing this thread, the only conclusion that I can come to is that you are wrong. Congress knew exactly what the REVENUE from online poker was and still shut it down rather than tax it. So, they obviously don't a [censored], just like I said.

[/ QUOTE ]

That is faulty logic. Saying that "Congress" shut it down is glossing over what really happened. Bill Frist almost single handedly got this bill passed (we know for fact that senators were not even given the chance to read the language of the gaming part of the bill), and he almost certainly did so because he is gunning for the presidency (pandering to the moral majority, etc). Congress, most assuredly does NOT know how much they could make off online poker. A % of them probably have some idea, but they do not *exactly* know, as you put it.

LotteryorPoker, I have read several of your posts today and you are heavy handed with your comments. You are clearly not an idiot, nor uneducated, but you are exaggerative and over-aggressive. Please tone it down. I believe you have intelligent things to say but your attitude does disservice to your credibility.

[aucu]

Nevada should make on line poker legal and grant 2 or 3 permits, say Bellagio, Wynn, Rio.

Let them get their feet wet on a state level then try to make deals state by state starting with Cali.

[LotteryOrPoker]

I do not consider anything I have said exaggerative. I am trying to make a point. My point is that Congress does not care about taxation, it is a moot issue. This legislation has more to do with Jack Abramoff than anything else.

People would do themselves a service focusing on the major issues at hand. That this is intrusive legislation that limits our rights as tax payers and voters to spend our money how we would like. If that is the focus, we will get a lot farther with our elected officials. No elected official wants to be seen as someone who infringes on the rights of tax payers and voters to spend their money in their own homes how they want on their hobbies, if they harm no one else. Any politician who takes this stance publicly might as well wear a made in China t-shirt while campaigning.

All of this useless rhetoric and hyperbole about possible loop holes or the reasons for this or that is just a waste of bandwidth and time spent reading and typing.

[LotteryOrPoker]

Hopefully, you do understand that the statements I have made about taxation, are the same statements opponents would make. I am all for taxation, I am all for regulation and control. I understand why this benefits everyone, but I am playing the devil's advocate and letting you know what opponents to online poker will say. That is why we should focus on issues that are more difficult to disagree with.

Stay away from the numbers games, because they can be manipulated. Stick to, "Poker is as American as apple pie and if I am not harming anyone else I can do what I want with my money."

[Uglyowl]

[ QUOTE ]
You also need to take your $12 billion and subtract all operating costs, dividends and other expenditures before you end up with net income.

[/ QUOTE ]

Incorrect. Dividends are paid with income after taxes.

[LotteryOrPoker]

[ QUOTE ]
[ QUOTE ]
You also need to take your $12 billion and subtract all operating costs, dividends and other expenditures before you end up with net income.

[/ QUOTE ]

Incorrect. Dividends are paid with income after taxes.

[/ QUOTE ]

Yeah, that was already pointed out. Double taxation, etc. But again, instead of playing a game of symantics, look at the rest of the post and judge the substance. Instead of nit picking the letter of the law, look at the spirit. You just illustrated the point I was trying to make with this thread and how far off most posting in this forum are.