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Aug. 14, 2013

Online Gaming: Should it be legalized?

The issue of legalizing non-sports online gaming is a long-standing and contentious problem. On one hand it seems to be a matter of personal freedom and of putting regulations in place to protect the consumer. On the other hand opponents argue that government-facilitated gambling is predatory, gaining revenue from problem gamblers and addicts. But the issue is even more complex than that.

Tax Revenue

Tax revenue that doesn’t come out of the wages of constituents is always alluring to legislators. The American Gaming Association believes that legalizing online poker would generate roughly $2 billion a year in revenue. With 31 U.S. states predicting budget shortfalls next year, the revenue is starting to look tempting.

Many people argue that the social costs outweigh the financial gain, citing the deleterious effect on communities due to ease of access, the difficulty keeping minors out of online gaming rooms, and the possibility of money laundering from organized crime. Proponents, however, point to the UK, which legalized online gaming in 2005, the results of which can be studied in the British Gambling Prevalence Study.

Regulatory Concerns

Under current regulations federal law prohibits inter-state online gaming, but there’s a small loophole-- provided the gamblers are within the state that facilitates the gaming, they can gamble in state-sanctioned online gaming rooms.

States have been slow to take advantage of this loophole in part because of the complicated regulations at play; federal regulations, state regulations, charters with Native American tribes and brick-and-mortar casinos. The legal headaches concerned with pre-existing laws are more than enough to persuade legislators to proceed cautiously, but they will also have to draft new regulatory legislation to protect online gamblers. So far Washington D.C., New Jersey, and Nevada have legalized online poker and Washington D.C. has also legalized blackjack and bingo.

It’s a Plugged-In World

People are spending more and more time online. They shop online, work online, and conduct their social lives online. For many people, online gambling is a logical extension of that. One of the biggest concerns surrounding legalizing online gaming is the ease of access for problem gamblers. It used to be that people with gambling issues could simply live in a city without a casino. It wasn’t foolproof, but it put temptation a bit out of the way. Legalizing gaming would be akin to offering drugs to addicts on every street corner, many argue.

But what about the many millions of people for whom gambling isn’t an issue? The UK and Europe have legalized all types of online gaming. The fact that it didn’t cause the immediate crumbling of their societies coupled with the substantial economic incentives means that ultimately, US legislators will find it hard to resist the public and economic pressures of legalizing it.

Do you think online gaming should be legalized? Share your thoughts in the comments.

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