As technology rapidly advances this day in age, the laws of man struggle to keep pace with the changes taking place in society. Gambling is a well established institution in the United States, from card tables in the saloons of the Wild West to the rise of Las Vegas in the 1960s; as long as Americans have had money they’ve had an itch to gamble with it. As the internet exploded in popularity and global reach during the 1990s and early 2000s online gambling and betting became more and more popular.
The rise in online gambling’s popularity was due in large part to the increasing popularity of poker among Americans. The World Poker Tour played a large part in this as it elevated the game from the tables of Las Vegas to a televised event by ESPN drawing millions of viewers. Several states in the U.S. have outlawed gambling and a select few have established casinos, with many of them outside of Las Vegas existing on Native American reservations only. Online gambling and betting has existed in the U.S. for years in a legal gray area. While not illegal, online gambling was frowned upon and not fully understood.
In 2006 the United States Congress decided to outlaw online gambling in the country. In a move to avoid increasing gambling problems and issues with online fraud, Congress made it illegal for financial institutions in America to transfer funds to any online gambling companies, blocking credit card and other forms of payment to online casinos.
Recently however, Rep. Barney Frank (D-MA) introduced the Internet Gambling Regulation and Consumer Protection and Enforcement Act (H.R. 2267) bill to the House Financial Services Committee, a bill that would legalize online poker and non-sports betting. On July 28, 2010 the committee voted in favor of the bill, 41-22. A companion bill to Frank’s H.R. 2267 was introduced by Rep. Jim McDermott (D-WA). McDermott’s bill, the Internet Gambling Regulation and Tax Enforcement Act of 2010 (H.R. 4976), would give the IRS the power to tax online casinos and the winnings of individual players.
The battle to overturn the 2006 ruling that made online gambling illegal in the United States is just beginning. Frank’s bill will now proceed to the full House of Representatives where a vote will need to be scheduled. The change of heart in the U.S. is likely driven by a desire to cash in on the increasing popularity of online gambling. Frank’s bill empowers the Treasury Department to license and regulate all online casinos operating in the U.S. and would require safeguards against underage gamblers and those with gambling addictions. Some have estimated the U.S. government would collect nearly $4 billion a year in tax revenue from the industry.
While the mood may be changing in the U.S., there are obstacles to online gambling becoming legalized? The big casinos of Las Vegas, and smaller Native American controlled operations, won’t be happy to see their monopoly on gambling broken up. Supporters will have to convince all parties that the move to legalize is in everyone’s best interest.
