Online Poker - Keep it ILLEGAL
Why? Well, you already pay a 9% fee when you play tournament and already pay rake in cash games. On top of that, do you want to be taxed?
How much tax are we talking? Well, Uncle Sam takes 35% on short term capital gains (e.g winnings in stock market), and I don't think the politicians in D.C would take it easy on online gambling. The following site provides a little relief as it says gambling winnings are taxed around 25%: http://www.bankrate.com/finance/mone...-winnings.aspx. But still, 25% is a lot!
What are the benefits of legalizing online poker? Deep down inside, most of us are sure PS and FTP aren't rigged despite our bad beats, so I'm not sure what added regulation will provide. Even while these sites are illegal, we don't anticipate them shutting down to US players any time soon and losing are bankrolls. So is the slight added comfort worth it?
The only benefit I see w/ legalizing online poker is more competition. But is more competition going to make us better off? Is reducing the tournament rake from 9% to say 5% (which btw would only happen w/ alot of competition) or reducing cash game rake a few % going to make us better off, considering we may end up paying 25% tax on winnings?
Plus, do we want more competition? Do we prefer one site have 100k and another 200k (sort of like it is now) or 6 sites having 50k player each? It may not matter to those that play holdem b/c it's sufficiently popular, but it will matter to mixed game players. The network effects benefit both the site and the players.
There are many paradoxical things in economics. For example, there are theories that the current legality of drugs promotes crime! Maybe as poker players, keeping our favorite hobby a "guilty pleasure" isn't that bad after all.