Online gambling looks like a tempting profit center for many local governments. In Iowa, for example, it is estimated that as many as 50,000 people gamble online illegally. And State officials recognize the potential tax revenues.
In 2006, the U.S. enacted the Unlawful Internet Gambling Enforcement Act (UIGEA) . Since, laws and regulations governing online gambling have grown into a mountain of laws, policies, regulations, etc with extreme variations from state to state. Essentially, the legality of online gambling comes down to whether it is legal to gamble online from within your State -and even then, not all gambling sites and games are equal. Some States might allow Internet poker and disallow casino type games, for example.
In any case, it is commonly acknowledged among lawmakers and mental health professionals that Internet gambling has significantly exacerbated the problem of compulsive gambling — it makes it more accessible and is available; there is no real way to control underage gambling online; and populations that would never have been exposed to gambling are now exposed. Internet gambling is responsible for the increase of female gamblers, for example.
But despite the understood dangers and problems that Internet gambling presents to our society, lawmakers can not help but look at the lost tax revenue. People will continue to gamble online illegally. So why shouldn’t that income be taxed? The debate is heading towards its peak this year. The 2006 enactment making Internet gambling illegal is not being enforced and the Obama administration agreed to a 6 month reprieve from enforcement while new legislation is considered that would legalize certain online betting activities such as poker.
A big question will be if the US legalizes more online gambling activities and individual States jump on the bandwagon to operate their own online gambling initiatives for revenue generation, will at least some of the funds go to treat the upsurge in gambling addicts we are going to see as a result? And what about the innocent victims of the addicts – family and friends who lose money and worse . . .?