States, Congress Headed For Online Gambling Conflict

A conflict may be brewing between state governments and the federal government over internet gambling. Most experts agree that the legalization of online gambling in the United States is inevitable. The main question surrounding the issue is who will benefit and get rich from legal internet gambling. Currently Nevada, New York, Hawaii and Illinois all have internet gambling legislation pending. Nevada is already taking license applications from online gaming companies. For cash strapped state and local governments the windfall from internet gambling would help them to address massive budget deficits and cuts in essential services.

Online gambling is shaping up to be a fierce battle between the states and the federal government. One Washington DC councilman who supported the district’s internet gambling laws said that large casino interests have teamed up with the federal government to steal the right to provide online gambling and the revenues from state governments. Congress is considering legislation that would make state based internet gambling illegal. Senate Majority leader Harry Reid has teamed up with internet gambling foe Jon Kyl to sponsor legislation that would make online poker legal at the federal level.

Many states had planned to offer other casino games such as internet bingo in addition to poker. Under the proposed federal law only poker would be legal and all other games would be banned. Federal legalization would keep all of the revenues generated in federal coffers and the states would get nothing. Washington DC councilman and online gambling supporter Michael A. Brown believes that “casino interests” were responsible for the repeal of online gambling in Washington DC. Brown stated “I believe that casinos have now reared their head in our city.” Brown also predicted that gambling “will be federalized and we won’t get any of the revenue.” When asked which casinos and corporations were influencing the council Brown said “I don’t know. I’m not sure.”

Critics who say that large casino interests are behind Washington DC’s policy reversal suggest that it is easier to lobby one set of congressmen than it is to lobby 50 state legislatures. Despite the threat of federal action some states are moving ahead with plans to offer residents legal internet gambling. Most intend to offer a variety of casino games in addition to skill based games like poker. Many states also plan to sell lottery tickets online. Since this is a major election year the outcome of any federal legislation is uncertain.