2012-The Year of the Online Gambler ?

In China it may be the year of the dragon but in the United States 2012 may very well be the year of the online gambler. In December the Justice department issued a ruling that may clear the way for online bingo, poker and casinos in several states. Many states have already indicated that they are considering the possibility of offering intrastate online gambling. The potential revenues are particularly attractive for states facing massive budget deficits and debt. According to the justice department ruling only sports betting is prohibited online.

Rick Bronson, chairman of U.S. Digital Gaming, said that the new ruling will give states the ability to offer online poker and lottery ticket sales. In addition to skill based games like poker some states say they will offer other games such as online bingo. Bronson estimates that online poker could generate $12 billion a year in revenue for states and that online lottery ticket sales would increase profits for state lotteries. Currently state lotteries generate between $60 and $70 billion annually. A 2010 report by Morgan Stanley estimated that internet gambling could bring in $5 billion annually.

Whittier Law School professor and gaming law expert I. Nelson Rose said that the Justice Department move is a “major Christmas present for the Internet gambling community.” Rose went on to say “We are about to see this explosion of Internet gambling sweep across the nation. All we’re seeing is every single state proposing more and more legal gambling. … Gambling is seen as a painless tax, involuntary tax so it is an easy way to raise revenue without raising real taxes.” Nevada is already poised to implement online gambling. Kentucky Governor Steve Beshear is promoting expanded gambling in the state and Illinois hopes that online ticket sales will boost sales.

Washington D.C. had plans to launch online bingo and poker gaming sites but last week the city council reversed course and gambling proponents will have to start over. Rose pointed out the need for extra revenue and stated “It’s money and [states] can’t raise taxes anymore and they can’t cut services anymore so they need a way to raise money and gambling seems to pay more tax.” For legislators raising taxes would be political suicide in today’s economic climate. Rose also said that states must have programs in place to identify problem gamblers and prevent underage gambling. In several states 2012 may very well be the year of the online gambler.

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