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Apr
24th

Online Gaming in the US Provides New Opportunities for Internet Gambling Operators

A recent article in the Financial Times reported that several states that have legalized internet gambling want to link with other countries to create a global market of regulated gaming sites with strong consumer protections. Nevada has passed a law that allows internet gaming operators in the state to offer their services to other states that have legalized internet gambling. While the federal ban on internet gambling remains in effect states are free to offer internet gambling within their own borders. In reality the federal law does not ban internet outright; it bans banks, credit card companies and other financial institutions from processing any gambling related transactions. There have been several attempts at the congressional level to legalize internet gambling but so far all have been unsuccessful.

Federal legislation currently proposed by Senate majority leader Harry Reid would only legalize poker and all other games, including internet bingo, would remain illegal. Three states have legalized internet gambling; Nevada, New Jersey and Delaware. Recently a legalization bill was introduced in the Pennsylvania legislature and has garnered a lot of bipartisan support. California and Illinois are also exploring legalization. The New Jersey law allows “compacts with foreign countries.” Illinois legislation contains a similar provision and gaming operators in Nevada are asking lawmakers for legislation that would allow international agreements.

The logic behind the proposals is clear. Betting markets are dependent on liquidity and making a profit. Some states are sparsely populated and the liquidity problem could be solved if these states were permitted to tap into global internet gaming markets. This will provide new and lucrative opportunities for European gaming companies to whom the US gaming market is currently closed. European operators have years of experience in regulated gaming markets and could easily put that experience to use in American markets. In 2006 when UIGEA was passed the online gaming world was in shock but since then most of the major players have recovered.

Several European operators have already reached agreements with casino companies in the US. 888 Holdings and Bwin are already prepared to provide the needed infrastructure for online casinos in the United States. Irish gaming firm PaddyPower has already been pre-approved for a Nevada interactive gaming license. State jurisdictions providing gaming services to several other states will become very attractive for European operators. Gaming experts say that billions are at stake and because of legalization many financial experts are telling their clients to invest in internet gaming company stocks.