Legal online gambling in the United States still far away

Two events occurred earlier this month giving the internet gambling community hope for the legal future of online gambling in the U.S., but judging from the past, legalizing internet gambling in the United States is far from easy or close to becoming a fact. First, we had the launch of the first legal North American online casino, ran by the Canadian province British Columbia Lottery Corporation, which despite the few hurdles along the way, is still one of the biggest stepping stone for the online gambling industry. Shortly after the launch of the first legal Canadian online casino, Rep. Barney Frank’s bill to legalize internet gambling in the United States enjoyed a hearing in committee. Both events occurring within a very short time frame had the gambling community buzzing with excitement and hopes that legal online gambling in the United States is close by.

Unfortunately, legal U.S. online gambling in our opinion, is far from becoming a reality. Of course, by online gambling we mean online casinos, sports betting and poker; as many of you may already know, betting on horse racing online is already legal, but with the exception of the major horse racing events of the Tripe Crown and mainly the Kentucky Derby, betting on the ponnies is not what it used to be and there is little interest, at least not enough to attract the interest of the anti-gambling groups. But the three forms of online gambling noted above are attracting millions of players, not only in the United States, but world-wide, as well.

Considering that Canada already has its first legal online casino, many would ask, why wouldn’t internet gambling become legal in the United States in the near future? Well, for starter - the famous Canadian online casino is far from the first precedent. The United Kingdom has long regulated their entire online gambling industry - online bookmakers operate in the U.K. legally and are even taking advantage of the many media to advertise their product, including on TV and on soccer stadiums. Online casinos are licensed and regulated and so are the internet poker rooms. And we are talking about private online gambling companies, not government-sponsored entities. Compared with the liberal online gambling laws in the United Kingdom, the lottery-ran online casino in British Columbia is far from the “wind of change” some people in the gambling industry are talking about. And while we are on the case of the first legal Canadian online casino, we should probably mention that the word “legal” applies only as far as people who play at that particular online casino will not be breaking any laws, in other words, online gambling itself is not legal in Canada and will not be until private companies are allowed to operate their own online gambling websites. Right now the BCLC online casino is nothing more than a state monopoly on online gambling, something the internet gambling industry should hardly be excited about.

Second, the United States is just not the kind of country where online casino website could be comfortably ran by the local government. Any careful observer of the gambling industry in the U.S. would agree that the notion that online casino could be a part of a state lottery is impossible in the current political climate in the USA. Even though gambling games, especially poker, are part of the America’s past just as much as the railroads, all forms of gambling are currently frowned upon by many special-interest groups with strong lobbies in the legislature bodies, both state and federal.

The bill submitted by Rep. Barney Frank, who has been a long time proponent of the freedom of the people to choose what they do with their own money in their own homes on their own time, is the best chance we can see some form of legalized gambling in the United States. In a nutshell, the bill is calling for regulating and taxing online gambling companies, without a doubt the most sane way to approach online gambling. But this bill is far from reaching the floor of the Congress, not to mention that even if the bill passes in its current form, opposition would be plentiful. Even today there are plenty of states which ban casino gambling completely, while technically only 3 states are exempt from the sports betting ban. And the likely outcome of the bill’s passing into law would be a long fight from many of those states with no casino gambling. It’s also a possibility that some states with casinos would too fight such bill in order to protect the current status-quo in their state.

And speaking of sports betting, it’s one of the most notorious form of gambling, thanks to the fact it has been banned throughout the country and ended up in the hands of mobsters and their bookies for decades now. The U.S. lawmakers fail to realize, again and again, that legalized sportsbooks are the forefront of the fight against game-fixing and other shady deals, often paraded by the opponents of sports betting. The fact is that the sportsbooks are the entities with most to loose from fixed games and have implemented many tools to help them track and uncover betting patterns which show possible match fixing. In the past couple of years alone there are a good number of examples in Europe, where legal online betting companies have uncovered match fixing scandals thanks to tracking such unusual betting patterns. Sportsbooks make their money from the “juice”, I.e. the 10 points they tag onto the betting line, thus they are a long-term business, where reputation is everything. None of them would risk loosing everything over one game.

Online poker is currently the one form of online gambling with the best chance of becoming legal, thanks to the popularity of the game in the recent years. In just few years the game of poker enjoyed a transformation from a weekend get-together with friends to a multi-million televised tournaments. And today almost every casino has a dedicated poker room, always packed to the rafters with players. Thanks to the World Series of Poker and the many spin-offs thereafter, poker is now the most popular card game in the world. We are also willing to bet that more people on the United States have heard of online poker than Facebook!

But even with online poker, the transformation to legalization will be long and tedious. Online sports betting seems to us and impossible achievement in the United States, while online casinos have their best chance of becoming legal only if the land-based casinos stand behind them and put their dollars into lobbying for the legalization of this form of online gambling. The best for both the online gambling companies and the players in the U.S. at this time is to repeal the UIGEA, which made it illegal for the banks to process transactions to and from online gambling websites. Thus if you think that adults should have the freedom to do what they want with their hard earned money - call your representatives and tell them about it. Let’s not forget that alcohol is perfectly legal to be purchased and enjoyed, but gambling online in the state of Washington is considered felony and could net someone a 5-year prison sentence. How is that for a slippery slope?

Published on 07/26/2010