The government of California could capture tax revenues of USD 650m in gaming tax over the next five years if it were to legalise on line poker according to a report from GBGC (Global Betting and Gaming Consultants).

California’s share of the US Internet poker market was approximately USD 448m in 2009 with 778,000 active accounts and this revenue is going offshore causing a loss of income for California.

“Our experience in regulated markets shows that legalisation and control is a more effective government policy than prohibition because technology will always be ahead of law which historically reacts to changing circumstances which legislators cannot predict. Ordinary people enjoy playing poker and it is better to regulate rather than criminalise what is a mainstream leisure activity” Said GBGC’s founder and CEO Warwick Bartlett.

The report states that the rate of tax will be a key issue because if the consumer or operators are taxed too high they will be driven to the value that exists off shore where low tax enables the operators to offer rebates and incentives. However customers will pay a premium to bet legally so pitching the rate at the correct level is key.