Gambling's Future Is Online, Offshore
Online gaming is booming abroad, but the Full Tilt Poker prosecution may have derailed it in the U.S.
.With the federal crackdown on Full Tilt Poker entering a new chapter today as prosecutors allege a massive Ponzi scheme, the scrutiny has already turned on the United States' own policy as a possible culprit in the alleged nine-digit scam. But as the pressure ramps back up to legalize and regulate online gambling at home, more and more nations abroad have recently started adopting legalized online gaming of their own, and the United States risks getting left behind.
At Reuters, Felix Salmon wrote on Tuesday, "in a weird way, strict anti-gambling regulations in the US are responsible for this fiasco. If poker sites were legal and regulated, we could trust the regulator — an arm of the US government — to protect gamblers’ funds." It's not for lack of effort on the part of the gambling lobby that there isn't such an enforcement arm. Back in May, a panel at the East Coast Gaming Congress decided that the Internet was definitely the future for their industry, estimating that "the potential annual revenue from legalized Internet gambling in the U.S. at nearly $80 billion," according to the Associated Press. That report pointed to legislation in the works to legalize online gambling, which Gov. Chris Christie vetoed earlier in May. In Nevada, the state gaming commission has already drawn up regulations for online gambling in anticipation of a federal law allowing it. When that law might come along is still anyone's guess, though lobbyists are pushing hard for it.
Meanwhile, jurisdictions outside the United States are increasingly saying yes to online gaming. On Tuesday, Denmark legalized it, in a decision the Financial Times suggested may be a bellweather for European Union nations hoping to regulate the practice. The Danish rule specifies a 20 percent tax on online gaming, as opposed to a 75 percent tax on land-based casinos. According to a Reuters story from Monday, the Gibralter-based online casino 32Red is looking to expand into newly open markets, in particular Italy, which legalized the practice in 2006.
On Monday, the American Gaming Association released a promotional video to accompany its lobbying push, comparing online gambling in the United States to the wild west. But Salmon and others say the latest allegations have probably made a U.S. law regulating online gambling even more unlikely, despite the wisdom in having one. Meanwhile, as the Wall Street Journal points out, Full Tilt's former players say they're owed some $160 million, and outside their online petition seeking payment, they don't have much recourse to retrieve the funds, at least until after the U.S. completes its case. That's a lot of money lost, and a lot of customers probably too burned to risk it again, in the United States or elsewhere.