Internet Gambling Back on the Table?
MARCH 11, 2009 - eMarketerRolling the virtual dice…
Smart money is betting that Congress will repeal the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) this year, or at least soon.
Barney Frank (D-MA), chairman of the House of Representatives Financial Services Committee, plans to bring back legislation to repeal the UIGEA this month. Rep. Frank maintains that online gambling is a fundamental freedom, and that attempts to make it illegal smack of Prohibition in the 1920s and 1930s.
In addition, much of the political momentum for repeal of the act is coming from online poker players who are fighting back.
“There is a dramatic need to have a regulated system that protects American consumers,” Jeffrey Sandman, a spokesman for the Safe and Secure Internet Gambling Initiative, told Reuters. “Right now, it's the Wild West.”
PricewaterhouseCoopers (PwC) estimates that the amount the US could raise from regulating and taxing Internet gambling is about 22% higher than it was in 2007—because US online gambling has grown despite the ban.
In fact, comScore Media Metrix found that as of last November, online gambling was the ninth-fastest-growing category online.
Making it illegal for businesses to knowingly transfer payments to Internet gambling operations, including payments by credit card, wire transfer or check, the 2006 ban was approved when Republicans still controlled both houses of Congress and President Bush was in the White House—and before the economy collapsed.
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I think Rep. Frank has introduced this bill at exactly the right time for both the players and the U.S. government. This is a very intriguing industry; posting strong revenue numbers in the midst of a 'global recession'. The fact is millions of Americans gamble online every day, and the anonymous nature of the Internet makes it impossible to prohibit this. But these players do deserve the same protection received by gamblers at brick-and-mortar casinos. Whether the wagers are online or offline, gamblers deserve diligent regulators who will make sure operators are honest, winners are paid promptly, minors are prohibited from gambling, and problem gamblers receive assistance.
And if that isn't enough incentive to legalize the industry, online gambling revenue is expected to top $125 billion by 2015. The U.S. has been missing out on millions of dollars in tax revenue that this bill would bring. And with our ever-increasing national debt, you've got to believe the new administration is looking for alternative sources of revenue.
- MJ Scott