Reports from the United States suggest US Attorney General Jeff Sessions is mulling a federal ban on all state-regulated online gambling. In 2011, much to the delight of betting companies across the United States, the Obama administration amended the Wire Act to hand states control of legalizing internet gaming within their borders. As a result, Nevada, Delaware and New Jersey began regulating online poker, while other states approved businesses such as internet lotteries
Yet, lobbyist groups have continued fighting the amendment in a bid to outlaw all forms of online gambling across the country. And it appears that Sessions is taking notice. The Attorney General has previously been vocal in his criticism of the amended Wire Act and suggested he will revisit it in due course. This indicates the Trump administration will pursue stomping out online gambling nationwide.
Such a move would deal a devastating blow to online poker sites, yet it could present a window of opportunity for Bitcoin bookmakers. Bitcoin gambling provides much more anonymity to bettors than online poker and other internet gaming sites. For example, Bitcoin bookmakers do not require users’ location details in order to open accounts. Bitcoin gambling sites such as 5Dimes, BetOnline and Bovada operate freely in the United States, and could stand to acquire more customers should a nationwide online gambling ban be imposed.
A move away from regulated online gambling also presents offshore betting operators with a chance to attract American customers. In the event of a ban, these customers would continue looking for ways to bet online and could do so through a VPN. This would expose them to unregulated offshore betting sites, which include hundreds of online poker, casino and sports betting businesses worldwide. In many cases, these businesses do not provide the security to consumers that state-regulated betting companies were obliged to. Without such safeguards in place, customers could be vulnerable to credit card fraud and other risks.
Critics have also pointed to the numerous drawbacks a ban would impose on state economies. New Jersey has collected $80 million tax revenue from online gambling companies over the past three years, and created 3,300 through the sector. Internet gaming has also helped revitalize the flagging fortunes of the casino industry in Atlantic City, with online play providing a much-needed boost to casino revenues. In Pennsylvania, where internet gambling regulation is planned to fill major budget gaps, online casino and poker businesses are expected to spill almost $500 million into the state’s economy over the next five years.
If regulated online gambling businesses are closed down, states would need to find alternative solutions for closing budget gaps. This makes a rise to personal and business tax likely, a measure that in itself would have negative impacts to state economies. Additionally, thousands of Americans employed in the online betting industry would lose their jobs, while the prospect of creating additional employment opportunities would be lost.
The evidence is compelling. A federal ban on regulated gambling poses serious risks to state economies and people’s jobs, not to mention consumers who seek to gamble with peace of mind. In contrast, it leaves the door ajar for potentially unscrupulous offshore operators to thrive in an unregulated environment. Legitimate gaming businesses and states such as New Jersey will undoubtedly be hopeful that Sessions considers these factors before pursuing a reckless ban.