Gaming Analysts Divided On Impact Of US Online Gambling Revenue

State lawmakers seeking to improve their local economy while gaining the support of voters heading into an election year, were given a gift on Christmas last month. The Department of Justice reversed its long-standing opinion that all forms of Internet gambling were illegal in the US under the 1961 Wire Act.

That ruling allows state legislators to start crafting online gambling regulation laws that could save their jobs this November. Whether or not the online gambling tax revenue will have a major effect on a given states economy, however, is up for debate, and analysts have varying opinions on the matter.

"I don't think revenues are going to be huge right off the bat because poker is not a huge source of revenue for casinos, only one percent," said Director of the Center for Gaming Research for the University of Las Vegas. Schwartz, did, however, offer up a way that states could benefit greatly from the expanded gambling.

The federal law still makes it illegal for individual states to accept gamblers outside of their borders. The one way the states could circumvent that law is if the gambling activity is legal in the state where the gambler resides. That led Schwartz to point out that one way the states could benefit would be for a revenue sharing system to be in place in areas of the country where online gambling is regulated.

For Nevada, the most profitable situation would be to share their revenue with California. Alone, Nevada could generate millions from online gamblers in their own state, but that figure would grow enormously if they could get in on the action from the millions of gamblers in California. Conversely, California could benefit by routing their players through Nevada online casinos, and then receiving a portion of the revenue.

Professor I. Nelson Rose is one of the most respected gaming analysts in the US, and he wrote shortly after the DoJ opinion was released that an online gambling explosion could be on its way to the US. Rose believes that revenue could be great for states if they move quickly and implement online gambling regulations. Already, Florida, Iowa, New Hampshire, and several other states have lawmakers moving on bills to create the foundation for operational online casinos.

New Jersey may be the closest of the states moving to regulate Internet gambling, with Senator Raymond Lesniak pushing legislation that could be voted on in the next week. If New jersey passes the online gambling law, they would join only Nevada and the District of Columbia with bills passed in favor of the activity.

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