Regulating online poker and sites by "taxing" the rake?

[ericicecream]

[ QUOTE ]
It would be 5% total...2.5% for Uncle Sam, 2.5% for the site. I just don't see how it could be done without charging more than $3 on a $100k PLO pot. And I don't see how Uncle Sam would allow a cap on their cut either since he doesn't give a lick about our winrate.

[/ QUOTE ]

Oops, meant to quote this one in my above response.

[Spook]

you can large number this, and get an average number of pots that are won by americans. Lets say 80%, then the poker site is paying 2% rake and collecting 3% rake for itself.

Irregardless of who actually wins the pot.

So if they want to make 5%, they up their rake to 7% rake and pay the 2.5% to USG on american pots which is 2 percent if 80% of players are american, and keep 5%.

So now everyone is taxed and the poker site makes its desired rate.

[KEW]

Three problems..

1..IRS will never do away with income taxes on gambling winning..If if they taxes every pot...Income taxes will still be paid by the winners..Plus your scheme ignores FICA taxes to "Pros"..

2..Sites will not be willing to cut there rake in half..This also infer the 2.5% would be on behalf of the players the sites would still be responsible for normal corporate profit taxes..Nor will foreign sites be willing to go along with it..

3..A uncapped 2.5% would bankrupt the games...That's 2.5% of EVERY pot leaving the game..At an avg of 60 hands per hours what's left in front of the players..This does not even take into consideration the "normal" house rake...

[ericicecream]

[ QUOTE ]
you can large number this, and get an average number of pots that are won by americans. Lets say 80%, then the poker site is paying 2% rake and collecting 3% rake for itself.

Irregardless of who actually wins the pot.

So if they want to make 5%, they up their rake to 7% rake and pay the 2.5% to USG on american pots which is 2 percent if 80% of players are american, and keep 5%.

So now everyone is taxed and the poker site makes its desired rate.

[/ QUOTE ]


...and 90% of the winning players become losing players due to the increased rake

[ericicecream]

[ QUOTE ]
An extra 2.5% (the sites already rake 5%) would be devastating to anyone's winrate, especially if there was no cap. I would much prefer that uncle sam take 25% of all my cashouts instead of 2.5% of every pot that I win.

[/ QUOTE ]

If i am understanding correctly, the sites make only 1/2 their normal profit whenever a u.s. citizen wins a pot. Correct?

If I'm a site, I'm thinking that if I agree to this then soon other countries will be demanding the same. I mean, why wouldn't they? Why should only the u.s. get to tax global online gambling?

I commend you for coming up with a unique idea, it's out of the box thinking that eventually comes up with innovative products. But this doesn't seem to work.

[PokrLikeItsProse]

The U.S. government would be better off requiring poker rooms to determine taxable income for each user who makes over $500 in the year and forwarding that data to the IRS.

[oldbookguy]

What you are suggesting is basically an excise tax?

Or would this replace any income tax the site may owe the U.S. government.

Additionally, the rake you propose would require determing what portion of the total rake came from U.S. players and non U. S. players, the government would not be entitled to the latter.

There are excise taxes in place already, .25% (from legal wagering, 2% from illegal wagering), why should this be any different?

There is a House Bill that deals with this, a simple 2% excise tax of deposits made from the U. S., no by the game / hand excise tax / rake. Thios would be much simplier and easier for all to enforce and accept.

BTW, the 2% proposed has a claus that it NOT be deducted from the deposit credited to the players account as well.

obg