How long until we play on Bellagio.com?

[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.