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Will States Push the Feds to Legalize Online Gambling?

A report in the Des Moines Register reveals that Iowa’s legislature is about to begin debating whether or not to legalize online gambling within the state’s borders. Currently, federal law prohibits online gambling. Nevada has already legalized online gambling within its own borders, but gambling across its borders would still violate a federal ban. This contentious issue is becoming more and more important to legislators as governments find themselves strapped for cash and looking for new ways to generate revenue. Where online poker is concerned, the stakes are very high, given the amount of money that the states stand to earn from the activity.A Bit ExaggeratedWhile an independent study commissioned by the Iowa state legislature found that Iowa would stand to make quite a bit of money off of online poker, the figure was considerably less than what lobbyists were claiming. The state’s independent study concluded that Iowa could expect to pull in around $13 million in tax revenues with a 22 percent state tax rate on gambling, given a realistic projection of how much online poker would generate. Lobbyists were claiming the figure would be closer to $30-$35 million, quite a bit higher than the independent report’s estimates.

Still, that’s a lot of money for a state. What remains to be seen is how the online poker could be kept within the state’s borders. Opponents of online gambling claim that Indian casinos would start offering online poker if it was approved in the state and, because they’re not subject to the same regulations, they would begin to offer it across state lines. Whether or not this makes any real difference in how people use the Internet for gambling remains to be seen. According to advocates, banning online poker, because of the global nature of the Internet, achieves nothing except for taking away potential revenues from the state.

Offshoring

However tightly regulated their preferred pastime may be, gamblers have proven themselves to be a few steps ahead of government efforts to take away their choice to enjoy a game of online poker. Many online gamblers use offshore online poker establishments to enjoy a few hands from the comfort of their own home. Moving money back and forth between accounts is not difficult and, because these companies are not located in the United States, the restrictive policies of the US government on online gambling do not apply to them.

For advocates of legalizing online poker, this means that the United States and the individual states that make it up are simply cheating themselves of a potentially very useful source of revenue. Online poker is incredibly popular, as are many other forms of online gambling. Congressional advocates such as the retiring Massachusetts Democrat Barney Frank have long pushed for Congress to lay off of o

Congressional Portrait, Congressman Barney Frank

Rep Barney Frank

nline gambling and to let people make their own choices about whether or not they want to participate in it. Given that choice, gamblers could potentially generate a lot of much-needed income for states and the federal government.

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Posted by on Jan 2 2012. Filed under Poker Legal News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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