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Starved state budgets prompt new interest in online gambling

Online GamblingOnline Gambling: Starved state budgets prompt new interest in online gambling

The District of Columbia is not thrilled that its residents are traveling to Maryland, Pennsylvania and West Virginia to gamble in casinos. Starved for cash, like states across the country, the district wants some of the millions in revenue that gambling generates each year.

So district officials want residents to gamble closer to home — inside their homes, actually. Or in cafes, restaurants and bars. By year's end the district hopes to introduce an Internet gambling hub that would allow Washington residents to play blackjack, poker and other casino-style games.

"They can do it from Starbucks, a restaurant, bar or hotel, or from a private residence," said Buddy Roogow, executive director of the D.C. Lottery, who expects the new games to eventually raise $9 million a year. "That's real money in D.C."

It's an idea gaining currency around the country: virtual gambling as part of the antidote to local budget woes. The District of Columbia is the first to legalize it, while Iowa is studying it, and bills are pending in places like California and Massachusetts.

But the states may run into trouble with the Justice Department, which has been cracking down on all forms of Internet gambling. And their efforts have given rise to critics who say legalized online gambling will promote addictive wagering and lead to personal debt troubles.

The states say they will put safeguards in place to deal with the potential social ills. And they say they need the money from online play, which will supplement the taxes they already receive from gambling at horse tracks, poker houses and brick-and-mortar casinos.

"States had looked at this haphazardly and not very energetically until the Great Recession hit, but now they're desperate for money," said I. Nelson Rose, a professor at Whittier Law School, where he specializes in gambling issues.

When it comes to taxing gambling, he said, "the thing they have left is the Internet."

Federal efforts over the last year to legalize online gambling have failed, so the moves by the District of Columbia and the states have put them into a murky legal arena with a potentially big obstacle. The Justice Department in recent years has vigorously pursued operators of offshore Internet casinos, shutting down their sites and arresting their executives when they travel to the United States.

The agency's position has been that these operations violate federal laws including the Wire Act of 1961, which prohibits wagering over telecommunications systems that cross state or national borders.

The move by states to allow online wagering prompted two United States senators last month to ask the Justice Department to quash those efforts, too. In their letter, Senators Harry Reid, a Nevada Democrat, and Jon Kyl, Republican of Arizona, said that about a dozen states were considering such efforts.

"In many cases, Internet gambling advocates in those states cite the silence of the Department of Justice in the face of these efforts as acquiescence," the letter says. "We respectfully request that you reiterate the Department's longstanding position that federal law prohibits gambling over the Internet, including intrastate gambling (e.g. lotteries)."

Alisa Finelli, a spokeswoman for the Justice Department, declined to comment beyond saying that the department was considering the senators' letter.

In the past, federal prosecutors have sent letters to a handful of states telling them that federal law prohibits "all forms" of online gambling. And in 2006, Congress passed the Unlawful Internet Gaming Enforcement Act, which prohibits businesses from taking the proceeds of illegal bets placed over the Internet.

But legal experts say the law sent a mixed message to the states. It seems to carve out an explicit exception for states to run online gambling operations. But in the bill's legislative history, it says it is not meant to amend existing law on the subject, which can be taken to mean that the Wire Act prohibitions still apply, said Mark Hichar, a lawyer who specializes in gambling law at Edwards, Angell, Palmer & Dodge in Boston.

"The legislative history is a real head-scratcher," Mr. Hichar said.

Arthur Terzakis, staff director of the Committee on Governmental Organization, a legislative policy committee in the California State Senate, said the 2006 law "gives states the right to do this."

Two California state senators late last year introduced bills to allow Internet gambling inside the state, estimating that such a move could raise roughly $1.4 billion to $2 billion over 10 years. One bill legalizes only online poker, while the other allows an array of games of chance and skill. The bills are still pending. California and other states say they will require proof of residency or use technological means to screen out nonresidents.

Some states, including New York and North Dakota, already sell lottery subscriptions online. Since 2005, New York has offered a subscription service that allows people in the state to enter a string of Lotto or Mega Millions drawings. The state says 100,000 people subscribe.

New York is exploring whether to allow people to draw from an escrow account when they decide to buy into a single drawing — say, when the jackpot reaches alluring levels.

The lack of a challenge against existing online lotteries from the Justice Department has given hope to other states that they will have clear legal sailing. But Mr. Hichar, the gambling lawyer, said the existing efforts may just "have flown below the radar."

Illinois, which passed a law two years ago allowing it to put its lottery online, asked the Justice Department about its plan but has not heard one way or another, suggesting it can move ahead, said John Cullerton, president of the State Senate.

He said Illinois had budgeted to gain some $200 million in additional revenue from moving the lottery online and allowing people to buy into it who "don't want to wait in line at a 7-Eleven."

"We'll be selling to new players, not the same old players," he said. "That means more roads and bridges."

Officials in other states sympathize with the logic.

"We need money," said Matt Fitzgerald, legislative director for Michael Rush, a Massachusetts state senator, who last month introduced a bill to allow the state lottery to test an expansion into other "games of chance," but not poker.

It's not all about revenue. In Iowa, which is running a budget surplus, lawmakers say they want to legalize online poker to create a regulated forum for a popular activity.

"A number of Iowans are doing it and may not even realize it's illegal," said Jeff Danielson, a Democrat and the president pro tempore of the State Senate. "We want a regulated environment that's safe and protects consumers."

Earlier this year, a bill to make New Jersey the first state to legalize online gambling passed the Legislature, but Gov. Chris Christie vetoed it.

Some critics say the state efforts will make gambling too accessible.

"It's the equivalent of opening a lottery retailer in every home, office and dorm room in America," said Les Bernal, executive director of the Stop Predatory Gambling Foundation, a nonprofit advocacy group.

"It's a business model built on addiction and indebtedness," he said.

New York Times

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18 comments. Last comment 3 years ago by rdgrnr.
Page 1 of 2
diamondpalace's avatar - Untitled 2.jpg
Dallas, TX
United States
Member #60284
April 12, 2008
3856 Posts
Offline
Posted: August 14, 2011, 5:49 pm - IP Logged

Built it and they will come.

    temptustoo's avatar - cat anm.gif
    usa
    United States
    Member #89199
    April 2, 2010
    2538 Posts
    Offline
    Posted: August 14, 2011, 5:53 pm - IP Logged

    Kind of funny how gambling was the BIG SIN and no one wanted it and now that all these states  are broke and so I guess it is okay.. ANYWAY TO GET YOUR $$$$$  EVEN TAKING THE OLD FARM FOLKS MONEY HERE IN IOWA...    CASINO'S IN THE CORN FIELDS..Disapprove  THIS COUNTRY IS ON A DOWNWARD SPIRAL ...

      rdgrnr's avatar - walt
      -Ridge Runner- Oracle of the Appalachians
      Way back up in them dadgum hills, son!
      United States
      Member #73904
      April 28, 2009
      14903 Posts
      Offline
      Posted: August 14, 2011, 6:13 pm - IP Logged

      I heard that DC really gouges lottery winners with taxes already.

      I wonder if they'll do the same with online gamblers.

        TnTicketlosers's avatar - Lottery-065.jpg

        United States
        Member #71120
        February 19, 2009
        990 Posts
        Offline
        Posted: August 14, 2011, 7:02 pm - IP Logged

        Well if we were treated right we wouldnt go to the other states.I drive 1 and half hour to Georgia..Look at midday payout here in Tennessee   9 Thousand payout,,,and Georgia people complain about a 283 Thousand payout,I dont get it.If they lived here and had to put up with bull <snip>,they would shut up.....Yes I will keep going there to play.I'm not a greedy person or spoiled,but we would like to have a win at least once a year.Personally I wish they would shut down these people in Nashville.

        This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

          haymaker's avatar - Lottery-012.jpg
          egg harbor twp.south jersey shore
          United States
          Member #112972
          June 29, 2011
          3163 Posts
          Offline
          Posted: August 14, 2011, 9:53 pm - IP Logged

          the elected officials who"work for us" just can not help themselves,gotten to used to spendin our $, vote em out.

          all of em.

          not savin mine.

          time to send a message!

          minds me of that tune."i been sent to send a message,god bless texas"

          Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

            haymaker's avatar - Lottery-012.jpg
            egg harbor twp.south jersey shore
            United States
            Member #112972
            June 29, 2011
            3163 Posts
            Offline
            Posted: August 14, 2011, 10:08 pm - IP Logged

            Well if we were treated right we wouldnt go to the other states.I drive 1 and half hour to Georgia..Look at midday payout here in Tennessee   9 Thousand payout,,,and Georgia people complain about a 283 Thousand payout,I dont get it.If they lived here and had to put up with bull <snip>,they would shut up.....Yes I will keep going there to play.I'm not a greedy person or spoiled,but we would like to have a win at least once a year.Personally I wish they would shut down these people in Nashville.

            This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

            wow, sounds like you need to organize a "no buy"to get the state's attn'

            like a boycott,maybe to get their attn.

            if they new how many ppl. were going to ga. or va. maybe they would start payin attn'

            Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

              redhot7's avatar - SetforLifeLogo
              California
              United States
              Member #112368
              June 17, 2011
              661 Posts
              Offline
              Posted: August 14, 2011, 11:20 pm - IP Logged

              The problem with online gambling is it requires a credit card and you don't want your credit card company to find out that you are gambling. They may cancel or reduce the credit limit because they might think that you are a high risk customer.

                jarasan's avatar - new patrick.gif
                Viva La Chance!
                Rockville, MD.
                United States
                Member #44103
                July 30, 2006
                4998 Posts
                Offline
                Posted: August 14, 2011, 11:32 pm - IP Logged

                DC govt is a rip off.  These morons want statehood.  They are so corrupt they make Al Capone look like an amateur.  I wouldn't trust these criminals with anything especially on line gambling.

                  jackpotismine's avatar - kanji for_peace.jpg
                  Kunming
                  China
                  Member #57910
                  January 23, 2008
                  3358 Posts
                  Offline
                  Posted: August 14, 2011, 11:35 pm - IP Logged

                  DC govt is a rip off.  These morons want statehood.  They are so corrupt they make Al Capone look like an amateur.  I wouldn't trust these criminals with anything especially on line gambling.

                  THE GOVERNMENT IS THE BIGGIST MAFIA!

                  I'll be trying Automatic Writing to get the winning lottery numbers.

                  Automatic writing  is an alleged psychic ability allowing a person to produce written words without consciously writing. The words are claimed to arise from a subconscious, spiritual or supernatural source.

                    rdgrnr's avatar - walt
                    -Ridge Runner- Oracle of the Appalachians
                    Way back up in them dadgum hills, son!
                    United States
                    Member #73904
                    April 28, 2009
                    14903 Posts
                    Offline
                    Posted: August 15, 2011, 12:53 am - IP Logged

                    THE GOVERNMENT IS THE BIGGIST MAFIA!

                    That's right and you should tell them to get out of Tibet!

                    And stop eating dogs!

                    Mao looked like Moe from the 3 Stooges. Spread out or I'll murdelize ya!

                      sully16's avatar - sharan
                      Listens to the wind
                      Michigan
                      United States
                      Member #81740
                      October 28, 2009
                      19988 Posts
                      Offline
                      Posted: August 15, 2011, 7:57 am - IP Logged

                      Michigan just did a survey about buying tickets on-line, it's turning into a trend .

                      There's only one US Flag

                        rdgrnr's avatar - walt
                        -Ridge Runner- Oracle of the Appalachians
                        Way back up in them dadgum hills, son!
                        United States
                        Member #73904
                        April 28, 2009
                        14903 Posts
                        Offline
                        Posted: August 15, 2011, 2:50 pm - IP Logged

                        Michigan just did a survey about buying tickets on-line, it's turning into a trend .

                        Las Vegas casino owners have made Harry Reid a multi-millionaire.

                        And as long as he's bought and paid for, we ain't gonna be playin' online in any substantial measure.

                        And the Las Vegas unions will see to it that Harry the Weasel will be there as long as he lives.

                        Sad but true.

                          sully16's avatar - sharan
                          Listens to the wind
                          Michigan
                          United States
                          Member #81740
                          October 28, 2009
                          19988 Posts
                          Offline
                          Posted: August 15, 2011, 2:59 pm - IP Logged

                          Las Vegas casino owners have made Harry Reid a multi-millionaire.

                          And as long as he's bought and paid for, we ain't gonna be playin' online in any substantial measure.

                          And the Las Vegas unions will see to it that Harry the Weasel will be there as long as he lives.

                          Sad but true.

                          I agree,

                          There's only one US Flag

                            rdgrnr's avatar - walt
                            -Ridge Runner- Oracle of the Appalachians
                            Way back up in them dadgum hills, son!
                            United States
                            Member #73904
                            April 28, 2009
                            14903 Posts
                            Offline
                            Posted: August 15, 2011, 4:13 pm - IP Logged

                            I agree,

                            Hope springs eternal though.

                            Maybe someday enough good Americans will stand up in Nevada to throw that crook out of office and into jail where he belongs.

                            We get our rights from God, not some weasel like Harry Reid.


                                                                         
                                                 
                                                                     

                             

                             

                             

                             

                                                                                                                               

                            "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                                        --Edmund Burke