The Outlook For Online Gambling

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Before October 2006, Internet gambling in the United States was unregulated and untaxed. In October 2006 The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed. The UIGEA made it illegal for financial institutions to remit funds to Internet gambling sites. Many operators withdrew from the United States as a result. The Internet gambling community has protested against the UIGEA, but without any real effect till date. Congressmen like Barney Frank did try to move legislation in support of Internet gambling but these too could not be converted to law. At the fag end of the Bush administration the UIGEA regulations were pushed through under the "Midnight Rules" so as to try and avoid review by the incoming President.

The outlook under the Obama administration does not look so bleak, though it would be difficult to classify it as rosy. This is because experts are as yet reading between the lines and there is no concrete categorical announcement from the administration. The Obama campaign has promised a more liberal and receptive approach towards all policy making and therefore it is evident that the President will listen with an open mind. The evidence that he will do so comes from the Citizens Briefing Book that he set up so that ordinary citizens could indicate their priority areas. Legalization of Internet gambling figured high in that book. The model of legalizing, regulating and taxing Internet gambling is working well in many European countries, notably in the United Kingdom. The potential that Internet gambling has for raising tax revenues is immense and that is something that cannot be ignored in these troubled financial times. Congressman Frank has pointed out that trillions of dollars have been promised in bailout packages and the funds have now to be arranged. Congressman Frank has also pointed out that Americans are gambling on the Internet. Right now they are adding to profits of operators registered in other countries and those countries are reaping the tax revenues. Because President Obama has promised a more open administration, it is likely to be receptive to these suggestions. Other favorable indications have also been cited. President Obama is technologically savvy and loves to play poker, which seems to be great news for Internet poker. However it is unlikely that he will let personal preferences color his judgment. There is one dark spot on the horizon. The Attorney General, Eric Holder, had said in his confirmation hearing that he would implement the UIGEA to the fullest. But the online gambling fraternity believes that those words were said only to enable his confirmation.

While it is evident that the Obama administration will be more receptive to the cause of Internet gambling, it is equally evident that it will not wave a magic wand and introduce the required legislation overnight. The online gambling fraternity will have to fight for it. The fight has already begun. The bill to overturn the acts passed under the Midnight Rule provision has already been introduced. Congressman Frank has announced his intention to introduce a bill that will seek to regulate and tax online gambling. Therefore while the outlook is favorable the path could well be long.

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