American Government Freezing Online poker earningsThis was published 12-06-2009
I realize American poker isn’t top priority for British players, however i think this is worth mentioning because of the motivation behind the actions. In the states, online poker is outlawed. So, they cannot usecredit cards, paypal, or any other method to get money online. They have to wire money to the casino, and the, in turn, get their winnings wired back to the states. Because of the way things are set up, these winnings are not taxed, and neither is the online casino.
Recently Federal prosecutors have frozen tens of millions of dollars in payments owed to online poker players. I don’t know what that means for that money, weather or not it’s confiscated, or if over a long period of time it will be returned to them. However, it appears that a new law proposed by Congressman Barney Frank would legalize and tax the online poker world in the USA. This is problematic as it sets a president. If the US proposes to tax online poker the same way they tax lottery winnings (28%, and it would also be counted toward income tax, so you would lose more than half of the winnings after the tax man is done with you), and other countries start to take the same steps, we could see a drastic change in the way online poker works.
It’s not necessarily the tax that is problematic, it’s the motivation for outlawing gambling in the first place. The government saw a hugerevenue machine that was not generating any income for them. So instead of working with the online casino’s to make it work for the US, they took a “moralhigh ground ” stance, and outright made it illegal. Now, 2 years later, they are systematically quashing the more serious players by freezing their money, and bringing poker back to the states, with no real incentive to actually play. When you are being taxed up the wazoo (yeah, i said wazoo), poker becomes a -e/v game.
And just think….if the British government needs a cash infusion, they just may follow the example the US has set.