During tough economic times, society tends to look towards levying “sin taxes” in order to provide revenue for the government. In most cases, the only way to create this extra revenue is by legalizing vice activities. For example, California is considering legalizing Marijuana in order to provide funds to the cash starved state treasury. So, this begs the following question: if these activities were legal, would you be more likely to enjoy them, given that you couldn’t be prosecuted or arrested? Would you be more likely to play at an online casino if it was licensed, taxed, and regulated by the USA government?

It’s a well known fact that Americans love to gamble online. Profits from USA based players soar into the billions of dollars each year, despite the fact that most government agencies regard online gambling in the USA as illegal. All the same, people still flock to online gambling sites, both sport and casino, regardless of murky USA law. As a result, many offshore gaming operations have built substantial businesses taking “somewhat” illegal bets from USA players. The gaming company owners dodge legal issues by forming shell companies, using offshore banking, or incorporating in places where online gaming is legal like Malta, Costa Rica, Cyprus, or Antigua.

What would happen if the USA legalized online gaming? Would taxing these offshore operations and/or regulating them encourage more people to gamble online? The short answer is “yes”. It stands to reason that there are many American gamblers who would love to begin gambling online, but have avoided doing so because of legality issues. A sudden influx of new “legal” USA online gamblers would almost certainly strengthen the internet gaming market, perhaps adding billions of dollars in additional annual revenues.

The long answer is a bit more complicated. There is a 900 pound gorilla lurking in the room, and that’s the land based casino industry. If the USA legalized online gaming, many top companies and businessmen like Steve Wynn, Harrah’s, the Kerzner company, and a host of others would pounce on the opportunity to break into a fresh market. Any backlash from such a development would land squarely on offshore gaming companies that can’t afford to compete with big land based gaming companies. In effect, legalizing USA online gambling would almost certainly squeeze out “Mom and Pop” offshore online gambling businesses, leaving only those that have substantial budgets and customer bases.

This might actually be a good thing if you look at the big picture. USA customers would feel much more comfortable gambling at websites created by well established USA gaming companies; and any bad apples in the offshore gaming bunch would disappear. Further, players could enjoy some new levels of certainty in terms of payment processing, customer service, and payouts. Instead of waiting 2 weeks for a jackpot payout from an offshore gaming operation, land based casino companies sporting new websites could pay players almost immediately. Slowly but surely, the reservoir of eager gamblers that once fed offshore gaming enterprise would dry out in favor of USA companies whose reputation and legality are not a matter of question.

To take it a step further, the government would make more money, there would be new employment opportunities, and players that were once vulnerable to shady offshore gaming operators would have some legal protection under any sort of new online gaming legislation. The industry itself would lose its current “Wild West” identity and slowly move towards a stable corporate image. It’s a virtual Win-Win for all parties, except for offshore gaming companies that are too small, too crooked, or unwilling to hand over taxes to the USA government.

So if online casinos and sportsbooks were legalized in the USA, would you start/continue placing bets online? The answer, yet again, is a near certain “yes”. In reality, no one in the USA cares about some sketchy casino operation somewhere in the Caribbean dying. Gamblers will always find a way to gamble. Most importantly, a favorable legal climate that opens the door to land based gaming operations would only have a few insignificant casualties: offshore casino/sportsbook operations that can’t make the grade. For once, it might be truly “safe” to gamble online, and that would be a good thing for almost everyone.

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