Internet Gambling Still in the Game

internet gambling

In 2006, the six-billion-dollar Internet gambling industry was dealt a hard blow by the Unlawful Internet Gambling Enforcement Act (UIGEA). The legislation, penned by Bill Frist, R-Tenn, was a last-minute addition to an unrelated piece of business which was immediately signed into law by then-President George W. Bush. The industry and the public was caught unaware by the legislative maneuvering which bypassed any substantial discussion in the media or Congress.

Frist was unwilling to stop there, but he was unable to gain traction when he attempted to go through standard channels in Congress. Even as Majority Leader, his efforts were unsuccessful. His devious maneuver, which enforced a big-government policy on a growing, thriving industry would find no partnering legislation. Now, it seems that states are finding a way around Frist’s law. The taxpayers are having to shoulder the load of extra, excess legislation to maneuver around the UIGEA, but the progress continues.

Since the UIGEA only outlaws way in which finances from gambling are handled and not the gambling itself, states which approve of gambling may yet be able to create a legal pathway for online casinos. Already, New Jersey, Nevada and Delaware have made it legal for citizens to play online poker for money. New Jersey and Nevada are well-known for historically running physical casinos.

Now, casino magnate Sheldon Adelson is fighting against online gambling on the state level. His campaign is also at the state level, where the Internet businesses are able to grab a toehold and circumvent Frist’s 2006 law. The politicians Adelson funds are working on his behalf to promote and pass any anti-online gambling law.

In Florida, Adelson’s proxy, Governor Rick Scott, has been using strong language to persuade state representatives to follow Adelson’s wishes. Adelson has thus far provided at least $750,000 to promote Scott’s political career. Scott has not made any clear statements about his relationship to his benefactor, but he did send a letter to Florida representatives urging that they fight Internet gambling, because it might ″invade″ the homes and dorm rooms of their constituents, presumably causing a state of moral decay. Adelson’s aim is to protect his business, Las Vegas Sands Corp., from losing any revenues to its key competitors, MGM Resorts International and Caesars Entertainment. Scott’s movements are in sync with Adelson’s goals.

Florida already has a state lottery and gambling on games such as Jai-Alai and animal racing have long been legal in the Sunshine State. Scott is not seeking legislation against those mainstays in Florida life, but does seek to squash any new competition in the marketplace. Such anti-business maneuvering is odd for a Republican whose party’s stated policies are often pro-business.

Adelson is also working to stifle Internet gambling in the state of California. He is enlisting the help of Democrats to help defeat a law which is presently active in Sacramento. The California law was still active as of March 17, 2014, and it is yet to be seen whether Adelson’s business interests will be protected in the Golden State. Mississippi and New York are following the path of California towards liberating computer users to double-down on virtual gaming tables.

Creative legislators are discovering that they do not have to be constrained by the UIGEA’s prohibition on interstate transfer of gambling proceeds. Nevada and Delaware have passed a law enabling one of the nation’s largest casino states with perhaps the largest banking state, as Delaware’s liberal banking laws makes it a home for most credit card companies and wealthy individuals often maintain their bank accounts there to avoid paying tax in their home state.

It is not clear whether a person need to be physically present in either state in order to participate in the gaming fun. If a person’s money is in Delaware and the casino is in Nevada, then it could be conceivable that the physical human could be in a ski resort in Colorado, conductiing the transaction between her Delaware account and the virtual tables in Nevada. In a legal environment where money is speech and corporations are people, the legal definitions of these concepts may be further stretched and challenged by online gambling.

Looking forward, state legislatures are being lobbied with messages promising a boost in tax revenue. In the current economic shakiness, such promises go a long way towards encouraging a representative to make the state environment friendly to a business which could be run and enjoyed within the boundaries of the state border. If a state could tax all of the revenues from a multi-billion dollar operation, local municipalities could likely see an immediate benefit. Despite Frist’s shadowy, late-night maneuver to destroy Internet gambling, it is a reality which seems to be building momentum at the state level.

By Hobie Anthony
Washington Post
Washington Post
Poker News
Las Vegas Review Journal

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