Internet gambling is mostly banned nationwide in the US, but both the owners of brick-and-mortar casinos as well as overseas online operators are pushing hard to legalize the business. Big time gambling businesses like Caesars and MGM Resorts are lobbying both Federal and State legislators to bring online gambling into the fold as a legitimate business. The prospect is an attractive one to legislators who are facing increasing pressure to balance budgets with declining tax bases and higher social services costs. The tax revenue off of well-regulated online gambling would help close that gap.
Online gambling is currently legal in three states: New Jersey, Nevada, and Delaware. New Jersey is finding, however, that the tax revenue is not booming as expected, with just $27 million in tax revenue having been generated since online gambling legalization last July as compared to the estimated $1 billion predicted. Much of the blame for the lackluster performance has been attributed to logistical and marketing problems as opposed to lack of clientele or lack of interest.
While the legislators of the several states debate, and debate warms up in the Halls of Congress, there is also legal basis to take the cause through the Federal Court system. The Constitutional basis for lifting the ban on online gambling stems from the Commerce Clause (Article 1, Section 8, Clause 3), which states that Congress has the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Any financial transaction that crosses state lines, like through the Internet, is subject to Commerce Clause. This means that States cannot impose restrictions on commercial transactions differently than other States. That is, a State may not treat businesses within its borders more favorably than businesses outside its borders. No online gambling cases have reached the US Supreme Court yet, but as more states legalize it, a well-funded online casino is sure to find a way to obtain court review.
In opposition to this movement stands one of the most influential conservative heavy weights in the nation and leader of the Las Vegas Sands Casino: Sheldon Adelson. Adelson has promised to throw his weight and considerable wealth at doing everything necessary to get online gambling banned in the United States. Adelson has stated the grounds for his opposition is moral. He worries that online gambling would spread to underage kids and that online web portals could serve as fronts for terrorist groups. He has also admitted, however, that he fears gambling moneys would all move online, rendering the brick and mortar casinos, like his Las Vegas Sands, obsolete as online sites grow larger and larger influence. Adelson faces an uphill battle in his push to ban internet gambling nationwide. Even his own trade group, the Amercian Gaming Association, backs the legalization of online gambling.