US States Divided On Online Gambling

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It seems that the states of the United States of America are being divided on the issue of online gambling. Some states have acted strongly against online gambling whereas others are looking at online gambling to generate much needed revenue.

Kentucky was the first state to fire the salvo against online gambling. In late 2008 the Governor obtained an order from the court to allow the state to seize the domain names of 141 online gambling companies. The companies grouped together under iMEGA and the IGC and challenged the order in court. They lost in the lower court but went in appeal in front of a three judge bench, where they won. Now the state of Kentucky has gone in appeal to the State Supreme Court and the hearings are expected in June.

Washington has been notorious for its stand on online gambling. In 2006 the state converted online gambling (except for horse racing) from a gross misdemeanor to a Class C felony. This means that online gamblers have been equated with pursuers of child pornography or torturers of animals. No actions have been reported under the law. However, recently Washington forced PRWeb an online news dissemination service to desist from accepting content from online gaming companies.

The most recent addition to the anti-online gambling section is Minnesota. Just a few days ago Minnesota has instructed Internet Service Providers to block access to about 200 online gambling web sites and has said that soon many more will be blocked. Minnesota has done this under the Wire Act of 1961.

Meanwhile the effects of the imposition of the UIGEA are being felt by some states. New Hampshire is one of them. New Hampshire ran a profitable lottery with tickets being sold online. However after the passing of the new UIGEA rules, credit card companies have classified lottery as a gambling activity to be abundantly on the safe side of the law. Therefore purchases of lottery tickets on line are being blocked and lottery ticket sales are on the decline. At a time when states need new revenue streams, the drying up of existing streams can be ill afforded. Illinois had to defer its plan to start a lottery after the New Hampshire experience.

In the rest of the world online regulation and taxing of online gambling is being increasingly looked upon as a source of much needed revenue. Some states in the US are veering around to this view. One of them is California. In January 2009 California had prepared a draft legislation that seeks to legalize online poker. The draft legislation proposes to issue licenses to existing land casino license holders to conduct online poker. The reason that no bill has been moved in this respect could be that the California legislature wants to assess the national mood. Unless the Federal Government takes a stand on this issue soon more and more states will be moving one way or the other.

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