Representative Jim McDermott (D-WA) has introduced an updated version of the Internet Gambling Regulation and Tax Enforcement Act of 2010. This new version would ensure that taxes and fees are collected from wagers place over the Internet raising some much-needed revenue for the federal and state governments.

The most significant change to the bill was a provision that allows State and Tribal Governments to collect a six percent tax on all deposits placed in their jurisdiction. It is estimated that with the addition of this new provision online gambling could generate as much as $30 billion dollars in revenue for the state and tribal areas in as little as ten years. That is in addition to the nearly $42 billion it is expected to generate for foster care assistance programs over that same period of time.

"This legislation is a win-win for federal and state leaders, providing an opportunity to regulate a currently off-shore and underground industry, protect consumers and put to good use tens of billions in otherwise lost revenue," said Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative. "At a time when many policy makers are faced with significant budget shortfalls, it is only common sense to choose regulation that will generate new revenues and create new jobs currently offshore as an alternative to layoffs, program cuts or imposing broad-sweeping taxes that may further depress struggling families and businesses."

With all but six states facing anticipated budget shortfalls for the 2011 fiscal year many have already begun to explore ways to bring regulated online gambling to their jurisdictions but current federal regulations have put a damper on such plans.

Chairman of the House Financial Services Committee Representative Barney Frank, Char of the House Democratic Caucus John Larson and Representative Earl Blumenauer have joined forces to create the Internet Gambling Regulation and Tax Enforcement Act of 2010 which is meant to serve as a companion to the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009. This act was a piece of legislation introduced by Frank that would in effect legalize and regulate the online gambling industry in the U.S.

Neither piece of legislation has been passed yet but many estimates that Chairman Frank’s bill will easily pass when the time comes. It has already found more then 65 co-sponsors who are willing to show their support.