Rake and Taxes

by , Apr 4, 2012 | 3:17 am

The drumbeat for action on online poker legislation continues to grow on Capitol Hill and in statehouses across America. Much credit is due to the commitment of the poker community. We have all refused to back down and have told Congress that we will never fold in this fight!

Telling our elected representatives that we want them to support online poker does more than simply push Congress to move legislation. While that is a great thing in and of itself, grassroots advocacy also helps PPA’s lobbyists on the Hill to advocate for player-friendly provisions. These include issues that impact the rake, tax fairness, the number of states participating, and plenty of other issues of importance to us – the players.

As an online limit hold’em player, one big issue I have seen personally is in the rake (the amount of each pot sites retain for providing the service). While rake may seem small on a per-hand basis at first glance, it adds up quickly for pros as well as for recreational players. Congress will not set a low rake legislatively via price controls, but they do have control over the level of competition in the marketplace. PPA is actively lobbying to maximize participation in the online market, thus ensuring healthy competition in rake and promotions.

PPA is also actively fighting for income tax fairness for players who file taxes as amateurs. This issue can be addressed either in the initial legislation or – more likely – in a subsequent bill. Either way, we all have to do our part now to lay the groundwork for that important effort.

Another issue is in state opt-outs. Congress will not force unwilling states to participate in online poker and will include a mechanism for states to opt out of any poker bill. Under some proposals, states will have to tell the federal government that they will not allow their residents to participate (if they say nothing, they are in). Under others, states will have to tell the federal government that their residents can participate to be in (if they say nothing, they are out). Yet other proposals provide for various hybrid approaches based on types of gaming currently permitted in each state. These approaches would result in different numbers of states allowing their residents to play on the new licensed poker sites. PPA is lobbying for provisions that would provide for maximum participation.

To succeed here and in the overall fight for legislation, it is important that we all do our part to advocate for the game. Will you do your part? Many groups are lobbying for online poker. Only PPA is lobbying for online poker players.

PC World’s very favorable review of the poker community’s social networking activism compared our efforts to Arab Spring and other world events of great significance. The efforts of the poker community are having a real impact. Let’s keep it up!

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