Why Gambling Online In America Simply Must Be Legalized

In order to understand why Gambling Online needs to be legalized we must first go back and see just where it came from but do not worry we do not have to go back very far. The birth of online casinos happened in about 1994/5 when Microgaming launched their first casino software, this was not the first step in the eyes of the U.S. Government however as the issue has always revolved around sports betting taken over the telephone.

This act of placing a sports bet over a telephone line was in breach of the 1961 wire act which made it an offense to take a wager over telephone lines in addition there was the more recent Professional and Amateur Sports Protection Act of 1992 (PASPA) which effectively banned all sports betting except in Nevada, Oregon and Delaware.

These laws were very old and were simply not conceived to handle internet gambling which had not yet been invented. The flood gates opened and the online casinos started doing business clear in their legal briefs that online gambling did not fall under the 1961 wire act and therefore the operators would not or could not be prosecuted for it.

This set the scene for many years to come and the only hiccups along the way were that the advertising companies and agencies that took the online casino business sometimes suffered pressure from various government agencies. This was a clever tactic and one that did work well from the point of the government as while the online casino operators had their legal opinions that they would not be prosecuted the advertising agencies had far more to lose as the gambling accounts only ever made a small portion of their business.

This was of course a bluff and is proved by the fact that for the majority it was only the small advertising companies that suffered the pressure.

Also remember that we are not talking about small shady agencies either, Google, MSN and Yahoo were always quite happy to take the revenue from advertising online casinos into America.

So the scene was set and business continued to grow at a simply astounding rate. Poker online came around 1998 but it was not yet in the form we all know today, it was in 2001 that Party Poker was founded and floated on the London Stock Exchange just four years later with a value of around $4.6 billion dollars and was the largest floatation on the London market for three years instantly joining the FTSE 100, the largest 100 companies. That is quite a growth figure in only four years from zero to $4.6 billion and proves just how much business came out of America which was Party Pokers main market.

Life in the online gambling world was very sweet in those days, we all knew that for every $1 we spent we were guaranteed to make lets say $6 that is not the true ratio but everyone hovered around there. Buying money was basically the name of the game. It was a given that at the end of each week an operator would add up the figures and spend around 30% of the pervious weeks profit on the following weeks advertising. If you follow this strategy through with your calculator you can begin to understand why the industry grew so fantastically.

The it all came crashing down. September 30th 2006. I remember that day as I was heavily involved in the industry, that was the day the Safe Port Act 2006 was passed by the House and Senate. For the gambling world this was huge shock as they were spending millions on the lobbying front to prevent any acts that may make their businesses illegal. It was a shock as it was attached to the Safe Ports Act at the eleventh hour and nobody even knew it was happening.

So that was that then, gambling online was finally illegal and no longer a grey area. Well no because that is not what the bill said instead it made it illegal in the US for American banks and credit card companies to process gambling transactions online. The reason for this seems to be that enforcing a law that made the act of playing at an online casino or poker site in your own home would have been impossible so why not put the responsibility onto the banks instead.

There are many many debates still raging about who should police what and do the banks really have the resources to do it but suffice to say the majority of online gambling operators pulled out of America.

So gambling online at a casino or poker site for American players is illegal and nobody does it anymore. What a load of rubbish. In 2008 the revenue for the offshore sites that still accept American players was estimated at $5.9 billion while the entire U.S legal gambling revenues including Las Vegas and Atlantic city were only $36.2 billion.

Those figures are staggering and prove that even in its current form the American people think they should have the right to gamble online and are willing to do just that. The problem however is that $5.9 billion is going offshore. Being in the industry since its inception and in fact having four generations of our family operating legal Gambling businesses I do know that 99.9% of that cash is going to very respectable companies and operators but who is there to check this?

The American people have been left high and dry with a draconian attempt to curtail their pastime. To put the situation into perspective most people have seen the American television series Las Vegas and have seen just how heavily regulated casinos are, well just think almost $6 billion left the States in 2008 in what amounts to completely unregulated gambling. That still make me draw a breath ever time I think about it.

So shat went wrong? How did it become such a mess?. The answer is simple is should never and could never be banned. To ban you from an activity on the internet that the rest of the world allows and even encourages sounds a bit like the censorship of the internet in China and does the American government agree with that policy?. The only way forward is for someone to step up to the plate and fight the good fight to legalize and regulate the U.S online gambling market.

That man at the moment is Senator Barney Frank who has a bill working through the system to do just that. At last count he had 59 co-sponsors for his bill. Will it succeed? well that is anyones guess but with the Obama administration needing the revenue it has a better chance than ever before.

The tax revenue for the government, while an important aspect is not the main reason it needs to be regulated. Having been in the industry all my life I know that you cannot allow anybody to take bets off people in any format under no regulation. The vast majority of sites and operators are whiter than white but it only takes that 1% to both damage peoples lives and damage the image of the industry.

There have been many attempts since that credit crisis by individual states to legalize online gambling at the State level, while this is a welcome step forward it is sadly the wrong step. It is possible to have individual State by State laws for bricks and mortar casinos and race tracks as they do not move but consider this, a player who lives in State A has a legal account with a casino and has the option of playing on his new iPhone but he is playing while waiting for a lunch date and has crossed the State line in the process.

Should he be arrested? Should he know what the law is in the next State? Maybe he has a different tax liability on the games he plays while here and this is where it gets way too complicated.

The answer has to be regulation and taxation at the Federal level to level the playing field for everyone. Remember almost $6 billion spent on online gambling during 2008 proves that the problem will not simply go away if the government hides its head in the sand.