Plan to Tax Online Gaming to Finance Healthcare Reform Just Not in the Cards

Last week I blogged about Senator Ron Wyden (D-OR) introducing an amendment to Barney Frank’s bill that sought to legalize and tax online gambling to help pay for healthcare reform.

But it wasn’t long after that Wyden’s staff said the senator did not want to introduce additional controversy into the healthcare debate. As a consequence, he pulled his amendment—which would have taxed online gambling to pay for heath insurance subsidies—from consideration.

“It’s a great idea,” Barney Frank said. “Why should we leave all that money untaxed?”

But this amendment would only serve to rile up the opposition, primarily conservative Christian groups that believe legalized online gambling harms family life and values.

But the financial implications strongly support Wyden’s amendment, and a PriceWaterhouseCoopers analysis estimates that an Internet gambling tax would rake in $62.7 billion in new revenue over the next 10 years.

Frank’s bill, which won’t go anywhere in 2009, now has 58 co-sponsors. Most are democrats but the list also includes Republicans representatives Pete King (N.Y.) and Ron Paul (Texas).

My gut feel is that UIGEA will eventually be repealed or otherwise neutered, but I wouldn’t bet on that occurring in the near future.