02/25/2012 :  ONLINE GAMBLING A TEMPTING OPTION FOR U.S. STATES
 
US Outlook: There are no Puritans in a recession.
 
The Independent newspaper in Britain examined the chances of online gambling legalization in the United States in a weekend piece, opining that "there are no Puritans in a recession", and drawing parallels between the ending of alcohol Prohibition and the present situation of online gambling, offering individual American states a fresh source of much needed tax revenues.
 
"Compared with jacking up existing taxes, or cutting public-sector pay and services, taking a rake from an online poker table looks very tempting to state-level politicians right now. Americans gambled $3 billion a year with foreign websites until the enforcement of a 2006 law that explicitly prohibited the taking of bets," the newspaper comments, noting that the desire of ordinary Americans to gamble online has not gone away.
 
The ubiquitous Richard Bronson of US Digital – a company set up to provide online gambling solutions – told The Independent that many US states would not resist the temptation to legalise and regulate for much longer.
 
Bronson told the newspaper, "I was sitting with a governor the other day and he said, ‘I want to do it, I'm ready to do it, but can you please get someone else to go first?'"
 
Nevada is likely to be the one to ‘go first', the newspaper opines, pointing to its long gambling history and well developed regulatory systems. However, the events in Iowa and Mississippi last week are noted.
 
The article pegs December as the real starting point for the present intense interest in legalised online poker. That was the month when the US Department of Justice abandoned its decades-old policy of lumping all online gambling into the Wire Act as illegal, instead admitting that the Act covered only sports betting.
 
"That removed the last of the legal doubts over whether states would be free to go ahead without interference," the newspaper observes. But it does acknowledge the previous ventures into legalization in a summary of previous initiatives involving Washington DC.
 
"State politics matter," the piece cautions. "Working closely with state legislators, and building trust, matters. Getting gambling licences is complex work. The big winners are likely to be the existing casino operators, who already have those relationships and have shown themselves responsible licensees.
 
"London-listed online gambling groups, eager to get their toes back in the US, have been seeking partnerships with US casino operators, but as providers of the relatively simple technology required to run an online gaming site, they will be very junior partners."
 
The newspaper ends on a perhaps pessimistic note for European companies with American online gambling aspirations, pointing out that only American casino industry veterans and existing licence holders will be trusted with legitimate online gambling, bringing jobs as well as revenues to the states.
 
And Bronson says that licensing authorities are likely to take a very dim view of firms who once flouted US laws to lure American gamblers to offshore websites – at least those who have not made their peace with the US Justice Department.