Why isn't online gambling regulated in the United States?

Why isn't online gambling regulated in the United States? Well, the title is a bit misleading, online gambling on horse racing is indeed legalized in the USA, but all other forms, including poker and casino games have no clear legal status (except in Washington State, where online gambling is felony). But why? Why the legal status of online gambling in the United States remains a gray area? No one actually knows the real reason, although financial interests (in the form of lobby-money) could be the reason. In order to un-boggle the minds of those who ask this question, we will look at the major points against online gambling made by the opposition.

Let's begin with gambling addiction. Many who oppose legal online gambling claim that it would increase gambling addiction among adults, since people can gamble away their livelihood from the comfort of their toilet seats. Extremely weak argument, considering that the current state of online gambling is likely to cause more harm than legalizing this form of entertainment. The latest study conducted by the University of Western Ontario in Canada and the University of Nevada at Las Vegas shows that people who gamble online at the current state of Internet gambling are more likely to develop gambling addiction. According to the study, which urges governments to legalize online gambling, if the industry is legalized and regulated, it would be much easier to contain those negative effects. Example: Alcoholism is an alcohol addiction, but there were no AA meetings during the Prohibition.

It's also very important to add that many online casinos and gambling websites have already taken the step of curbing gambling addiction, even though it's more accidental than intentional. Almost all reputable gambling websites strictly enforce a "deposit limit", a limit on the money you can deposit in a certain period, usually daily or weekly. Admittedly this was done to shield the online gambling companies from big credit card charge-backs and disputes, but it goes a long way to protect customers from gambling their money away on a single spin of the roulette wheel, something some land-based casinos would allow you to do. Do you remember Ashley Revell? Ashley Revell was the British, who went to a land-based casino and bet his entire lifesavings on a single spin of the roulette, back in 2006. The buzz about the bet was enormous, the bet was even videotaped and later ran the news all over the world. The casino where the bet took place - The Plaza Hotel-Casino in Las Vegas! Something like this would have never happened at an online casino.

Money laundering - some opponents of legal online gambling are afraid that online casinos and sports betting websites could be used to launder money for terrorist or other criminal organizations. Could it happen? Sure. But let me ask you this - wouldn't money laundering be less likely to occur if the online gambling websites were actually licensed, regulated and monitored? Even if you completely ban online gambling throughout the United States this doesn't mean it would go away - sports betting is illegal anywhere else but Vegas, yet local bookies continue to thrive throughout the country, despite the laws and the severe penalties. Making an act illegal certainly doesn't guarantee its disappearance, on the contrary, it's just pushed underground "out of sight - out of mind". The current state (or a future country-wide ban) of online gambling not only does nothing to prevent money laundering, but also costs millions to the IRS in taxes lost.

And we left the biggest argument for the end - children. Every opponent of legalizing online gambling uses the children-argument at least once, while making a point against gambling online. There are many ways a parent could prevent their children from gambling online, you can read the basics here. But to prove a point, let's compare online gambling to Internet pornography. No, they don't have anything in common, other than the fact the both forms of entertainment are targeting the adults. It's because of the differences we have made this comparison.

Right off the bat, here is a rude awakening to all - did you know that in the United States simulated or "virtual" child pornography is legal? Yes, in 2002 the U.S. Supreme Court struck down a 6-year-old law that prohibits the distribution and possession of virtual child pornography that appears to, but does not, depict real children. Also, did you know that the only law against children accessing pornographic websites required that public libraries, as a condition of receiving federal subsidies for Internet connectivity, employ filtering software to prevent patrons from using Internet terminals to view images of obscenity and child pornography, and to prevent children from viewing images "harmful to minors"? And what prevents a minor from purchasing cigars online? A checkbox certifying you are of legal age at the bottom of an order form?

But what prevents minors from gambling on the Internet? I'm glad you asked. In an unregulated online casino today you need to provide the following information before you can play for real money - name, address, social security (often optional), telephone number, credit card information. If this is your fist time depositing at this online gambling website, often you will be required to phone in and confirm your information and that you have requested the deposit. When you want to withdraw your winnings for the first time you will have to fax in a copy of your credit card used for the deposit (front and back) along with front and back copies of your driving license. Everything must match! Most likely you will receive your winnings in the form of a check with the name and address which match those on the casino account. Could you please point me to any other place on the internet with such scrutiny when it comes to verification? You could probably get your credit report using less information than gambling online. So why are YOU against legal online gambling?!?

Published on 07/18/2008