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Pressure To Legalize Online Gambling

February 27, 2009

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Ever since the economic crisis has be acknowledged and accepted several experts have said that it is time for the United States legislators to regulate and tax online gambling so that the Federal and State governments can add significant revenue streams. A new report released by PricewaterhouseCoopers has reiterated the same thing.

The PricewaterhouseCoopers report has come up with some numbers as well. It says that the United States could raise almost $52 billion in revenue over the next ten years by legalizing online gambling and imposing a tax on it. This figure is 22% higher than the estimate prepared last year. Jeffrey Sandman, a spokesman for the Safe and Secure Internet Gambling Initiative, said that the reason for this is that online gambling is growing despite the difficulties imposed by the UIGEA. This report will be one more arsenal in the armory of the associations of online gambling operators who are putting immense pressure on the legislators to relent.

The pressure is coming from the states as well. California has joined the list of states that are at least talking about legalizing online gambling. The state reported a budget deficit of $42 billion and has pinpointed online gambling as one of the avenues for meeting part of the deficit. Governor Arnold Schwarzenegger has already initiated some steps in this matter. Californian legislators will be meeting some of the leaders of the online gambling industry at an i-gaming conference in May. The founder of iMEGA, Joe Brennan Jr. is one of them. On the agenda will probably be how to overcome the legal hurdles imposed by the UIGEA.

New Hampshire is another state where the effects of the UIGEA have become apparent. And surprisingly the issue is lottery, where it is legal to sell tickets online. However since the passing of the revised UIGEA rules in November last year the online lottery sales have dropped significantly. This is hurting the state revenue. Apparently the online financial service providers feel that the rules are not clear as to which areas of online gambling are allowed and which areas are illegal. Therefore they are blocking online payments for purchase of lottery tickets to be on the safer side. Illionois is also reeling under a revenue shortfall. The Illinois Senate President, John Cullerton, is considering a proposal to start selling lottery tickets online in order to meet the deficit. However he has been apprised of the New Hampshire situation and will have to put the proposal under greater scrutiny before moving it in the legislature.

Even the notorious state of Kentucky is not immune from economic pressure. This week a proposal was furtively introduced calling for permitting video gambling terminals at seven horse tracks. Very clearly revenue is in short supply and more and more state governments have begun to look at online gambling in some way or another.

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