US Stimulus Package: Regulate Online Gambling

This is a guest post by John Holloway of slotsgeek.com While Internet gambling over the last decade has largely threatened land-based gambling in the United States, many state governments, and the federal government as well, have desperately tried to keep the money spent by US gamblers in the US by prohibiting online gambling. Thus far, their attempts have been fruitless, and have in fact added even more grease to the fire. Internet gambling went from a small online industry to a giant Internet commerce over night. As government officials have seemingly been running around in every direction trying to tame the beast that is online gambling, they have been butting their heads against the wall at every corner they turn. What they may now be realizing, after seeing other nations successfully regulate Internet gambling, is that trying to prohibit US citizens from gambling online is like trying to keep pee out of a swimming pool. The bottom line is that the US economy is hurting. The US needs all the help it can get and letting billions of dollars fly out the border via online casinos and poker rooms is not helping. Online gambling revenue is expected to reach $125 billion by the year 2015. That’s a lot of money that US markets are going to miss out on. By legalizing and regulating online gambling, the US economy may just get the bump it needs. It is no secret that the US government has been fighting Internet gambling since as early as 1997. Both the Internet Gambling Prohibition Act of 1997 and the Internet Gambling Prohibition Act of 1999 were failed attempts at nipping the industry in the bud. But not until the UIGEA did the federal government have any success in the fight, whatsoever. But they ultimately failed again, forcing otherwise reputable online gambling establishments, online funds transfer firms, and online gamblers, themselves, to find loopholes in the laws. As a result, those US players, who otherwise have been under hard times financially, have attempted to save money on lavish vacations to gambling cities, choosing to gamble online, in their homes, at a much cheaper rate. These hardworking and honest Americans are forced to break the law and send their US dollars overseas, on a daily basis. Why not keep American dollars in the American market by allowing online gambling businesses to operate on American soil? Too easy perhaps? Whatever happened to the cry of US markets to “Buy American!”? When it comes to online gambling, the US government makes it impossible for the nation to profit from the billions of dollars that is generated by online gambling every year. Not to mention the taxation opportunities that other international governments (Japan for instance) are taking notice of. Many countries have chosen to embrace online gambling and take action, so that no more taxable income is lost to countries like Costa Rica and Malta. In the year 2000, $61.4 billion in consumer dollars was spent on traditional gambling in the US. Of that, more than $20 billion was taken in by the US government in gambling privilege taxes (about $0.34 on the dollar). Since then, due to the US federal government’s lack of ability to deal with the so-called problem and avoidance of the issue, the taxation opportunities lost by the US government on online gambling are astronomical. If online gambling were treated as traditional gambling, the US government may not be in the position they are in today. Instead of welcoming the industry of online gambling and embracing it as the future of gambling revenue, the US government has deemed the industry a menace to society without ever giving it a chance. Back in 1998, Attorney General John Ashcroft, in a speech to the Southern Republican Leadership Conference, referred to Internet gambling as a “cancer on the soul of our nation.” It is sad that what government officials see when they look at online gambling is a loss in taxable revenue from lotteries, horse racing, and land-based casinos. What they should see is a trend in Internet commerce that is nothing less than a cash cow for state and federal taxation purposes. Legalization of online gambling at online casinos and online poker rooms would eradicate many of the problems that the US government has created for US players, if for no other reason but to stimulate the aching US economy and boost the influx of taxable gambling revenue.