Internet Gambling Will Be a Big Issue in 2014

Forget the threat of another government shutdown and all the arguing over Obamacare. The next big issue in 2014 may be the legalization, or prohibition, of internet gambling. Internet gambling is now legal in three states; Nevada, New Jersey and Delaware. There are supporters on both sides of the issue and one anti gambling extremist, Sheldon Adelson whose wealth is estimated at $28 billion, has vowed to spend ‘whatever it takes’ to keep online gambling illegal. When the economy gets sluggish politicians consider the virtues of vice and the tax revenues it can produce.

Cash strapped states across the nation are looking for new revenue streams and internet gambling is increasingly attractive to politicians. In the not so distant past several states expanded gambling in an attempt to fill dwindling state coffers. New Jersey, which intil recently had a monopoly on gambling east of the Mississippi, is now struggling with diminishing revenues from gambling in Atlantic City. One upscale casino and resort recently declared bankruptcy and most of the casinos have partnered with European internet gaming operators to provide internet gambling services to New Jersey residents. The casinos are required to use geo locating software to make sure all players are located within the state’s borders.

During the past decade federal policy on internet gambling has been vague on what is legal and what is not. In 2011 the Justice Department issued an opinion that sports betting is the only prohibited form of gambling under the 1961 Wire Act. This paved the way for states to adopt their own policies regarding internet gambling. Experts say that state by state legalization could result in a confusing mish mash of conflicting rules and regulations. Next year as many as 12 states will take up the issue of internet gambling. Some states plan to limit gambling to poker while others plan to offer a variety of games including internet bingo.

Like all vices the best outcomes are usually when they are regulated and kept out in the open. Prohibition should have been a lesson learned but many of today’s politicians have not learned the lessons to be gleaned from prohibition. Some experts worry that if the gambling industry shifts from a land based business model to a technology based industry tens of thousands of jobs could be lost. Online gambling is a complex issue and there are no easy answers.