Boom in Internet gambling ahead? US policy reversal clears the way.
The Justice Department has reversed a longtime view that online poker and lottery wagering are illegal. With the move, states are expected to engage in a high-stakes pursuit of new gambling-related tax revenues.
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Nevertheless, the decision is a boon to states and gambling interests trying to capture revenues from online gamblers, including the 20 percent of college students whom the Annenberg Public Policy Center found play online poker at least a month.Skip to next paragraph
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The day before the Justice Department announcement, Nevada gambling regulators voted to approve first-in-the-nation state online poker regulations, aimed only at players within the state. Illinois has also moved forward with online gambling regulations, seeing the DOJ announcement as vindication for its legal arguments about how the Wire Act pertains to online gambling. Under the Bush administration, Illinois was informed that selling lottery tickets online would be a violation of the federal Wire Act.
In addition to Nevada, New York, and Illinois, the early-voting presidential primary states of Iowa and New Hampshire hope to expand state lotteries to include games, predicts Professor Rose. Cash-strapped California is another likely player, as is New Jersey, where a referendum on the issue is likely after Gov. Chris Christie (R) vetoed an online gambling law passed by the Democratic-controlled state legislature.
While the Justice Department ruling does not specifically address interstate gambling, legal experts say it's likely to be allowed, at least between states that specifically regulate online gambling.
"States have felt handcuffed by this ambiguity that surrounded this issue," Melissa Riahei, a former general counsel for the Illinois state lottery and now an online poker lobbyist, told The Wall Street Journal. "What this does is it really removes the handcuffs the states have had on them that prevented them from fully utilizing this asset they've had for the demographic of casual gamers to play the lottery every day."
States' efforts to sanction the growth of online gambling has one unique critic: Sheldon Adelson, owner of Las Vegas Sands Casino and one of the world's richest men. Mr. Adelson said in interviews this month that he sees state-sanctioned online poker partly as a threat to traditional casino gambling.
But he has also couched his opposition in both moral and technological terms, arguing that loosening the reins on online gambling will take a heavy toll on young people, especially because he believes current technology isn't robust enough to keep children from betting real money using their computers.