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• Obama Legalize Online Gambling
• Should More States Legalize Online Gambling Laws
• Should More States Legalize Online Gambling Sites

Gambling addiction is real, but the subject of this debate is not whether addiction is good or bad — it’s whether online gambling should be legalized. People that have the itch will scratch it. One reason that the yields are not expected to be huge is that many states are considering legalizing only online poker, which they argue involves more skill and less chance than other forms of.

For this series, we welcome members of the University of Minnesota debate team to defend or challenge the argument for the nationwide legalization of online gambling.

Defending online gambling is Luke Plutowski, a recent graduate of the University of Minnesota and a second year Ph.D. student in the Department of Political Science at the University of Illinois at Urbana-Champaign. He can be followed on Twitter @LukePlutowski.

Legalizing and regulating online gambling would bolster economic activity, provide billions in tax revenue, and give consumers an added degree of freedom over their pocketbooks.

Those opposed to legalization of internet gaming often overlook the fact that millions of Americans regularly engage in gambling, despite its legal status. The federal and state governments allow betting at casinos, poker rooms, racetracks, sportsbooks, and online fantasy sports websites, and actively encourage citizens to play lotteries, scratch offs, and pull tabs. The arbitrary restrictions on certain forms of online gambling do little to prevent people from placing their bets. Moreover, by prohibiting U.S. companies from providing a service that many currently receive from offshore websites, the U.S. government is not only losing out on taxing an industry worth an estimated $30 billion, but it is also forcing people to put their money into insecure, exploitable, and untaxed foreign accounts.

It is not the government’s duty to regulate the moral behavior of American citizens, especially for a victimless activity like gambling. While compulsive gambling is a very serious issue that affects about 0.6% of the U.S. population, the solution to the problem should not be banning gaming for everyone, but rather strict regulation of the industry and more robust state-sponsored addiction services.

Challenging the argument is Cody Crunkilton, a 2015 graduate of the University of Minnesota majoring in Political Science and Spanish.

Legalizing Internet gambling would expand problem gambling and put individual’s livelihoods as well as the economy at risk. The ease of playing from home combined with the high-speed, anonymity, and instant gratification provided by online gambling make the dangers of addiction far greater online than at brick-and-mortar casinos.

The social costs of problem gambling are devastating–divorce, bankruptcy, crime, job loss, embezzlement, and suicide are just a few of the consequences which can result from a gambling addiction. These implications ripple outwards to the broader economy. One study by John Kindt, professor of Business at the University of Illinois and noted gambling expert, found that the costs associated with problem gambling outweigh the revenues by as much as six to one – more than erasing any transient increase in revenue from legalization. Moreover, legal gambling is a form of regressive taxation, with the greatest cost falling upon those who earn less than $10,000 a year.

Banning online gambling hardly impinges upon anyone’s freedom, as conventional gambling remains readily available both in personal settings among friends and at state-sponsored brick-and-mortar casinos. There is no defense of legal online gambling which justifies giving predatory websites free reign to exploit the most vulnerable segments of our population.

Today’s Question: Should online gambling be legalized nationwide?

Chris Krafcik of GamblingCompliance recently testified in front of the California Assembly Governmental Organization Committee on the current and future state of legal online gaming in the United States.

The presentation by Krafcik, GC’s research director, included several predictions about legalized online gaming in the U.S.

Krafcik called the current efforts in Pennsylvania, California and New York “Wave 2” of online gaming expansion in the U.S., which he characterizes as the time period from now until 2017. Krafcik went on to name four potential contenders (Rhode Island, Connecticut, Illinois, and Ohio) for what he is calling Wave 3, the period between 2018 and 2020.

According to GC, one or more Wave 2 states would pass an online gambling bill by 2017, and one or more of the Wave 3 states would pass online gaming legislation by 2020.

Here is where these states currently stand and their prospects for iGaming expansion by 2020.

‘Wave 2’ candidates

Pennsylvania (GamblingCompliance estimate 2015-2016)

Pennsylvania continues to look like the country’s best bet to legalize online gaming, but time is starting to run out on hopes for 2015.

If online gaming is going to be legalized in Pennsylvania it will almost certainly come via inclusion in the state’s budget. But Gov. Tom Wolf and Republican lawmakers are at an impasse over a budget that was supposed to be approved earlier this week. And there are still several wrinkles that need to be ironed out among legislators and casino operators.

The good news is, iGaming in Pennsylvania is starting to look like an inevitability; a case of, “if not this year than next.”

Why is there so much optimism in Pennsylvania? 11 of the state’s 12 casinos are on board. Lawmakers are pushing for gaming expansion. Regulators are confident they can handle it.

US Poker Prediction: Pennsylvania will legalize online gaming in 2015 or 2016.

California (GamblingCompliance estimate 2016-2017)

California continues to confound iGaming analysts. The state begins each year filling us full of hope and optimism that this will be “the year” for California and they’ll pass an online poker bill before pulling the rug right out from under us.

There are currently two and possibly three unresolved issues preventing California from passing an online poker bill:

1. Does California need a bad actor/tainted asset clause?
2. What role should the state’s horseracing industry play?
3. Potential issue: Who will regulate the online poker sites?

Because of points 1 and 2 above, California appears to be at an impasse when it comes to online poker expansion. And even if these issues get resolved, point 3 could quickly rear its head when a bill starts to pin down specifics.

For iPoker to pass by 2017, there is going to have to be a dramatic change by one of the factions, and there has been no indication that anyone is ready to compromise to that extent.

US Poker Prediction: California will legalize online gaming no sooner than 2017.

New York (GamblingCompliance estimate 2016-2017)

New York is a bit of a long shot for expansion in 2016 or 2017 in my opinion.

For New York to join the ranks of regulated online gaming jurisdictions, a number of lawmakers in the Empire State have indicated they must first get their brick and mortar casinos up and running.

Even when this occurs, lawmakers will likely want to see a couple years of revenue results before voting on another expansion of gaming in the state.

In New York’s favor, lawmakers in the Assembly (J. Gary Pretlow) and Senate (John Bonacic) have introduced online gaming bills in 2014 and/or 2015. Thus far, these bills haven’t gained any traction, and even Pretlow is somewhat pessimistic about expansion in the near term.

On the lobbying front, MGM is making a strong push for iGaming expansion through their Let NY Play campaign, but MGM was also passed over for one of the state’s land-based licenses, which might quell their push.

US Poker Prediction: New York will legalize online gaming no sooner than 2017.

‘Wave 3’ candidates

Connecticut (GamblingCompliance estimate 2018-2020)

Even though there is little public push for online gambling expansion in Connecticut, the state is a solid choice to pass an online gaming bill by 2020. The reason for this optimism has to do with the gaming dynamics in the state.

Foxwoods and Mohegan Sun have a veritable monopoly on legal gambling in Connecticut and seem to be behind just about every gaming expansion discussion.

In fact, Connecticut might even sneak into Wave 2 if Foxwoods and Mohegan Sun decide they’re interested in iGaming expansion. That speculation is based on comments by Foxwoods Director of Administration of Interactive Gaming Frank Pracukowski, who told attendees at the C5 Online Gaming Conference the state has told the two Indian tribes, “When you’re ready [for online gaming] you come to us.”

If the Pequot and Mohegan tribes decide they want online gambling, it might breeze through the legislature very quickly.

US Poker Prediction: Connecticut could legalize online gaming as soon as 2016.

Rhode Island (GamblingCompliance estimate 2018-2020)

Because of the state’s small size (less than 1 million residents) Rhode Island will need several things to occur before they even consider passing an online gaming bill:

1. Multiple other states to pass online gambling bills
2. A willingness from these states to enter into interstate agreements with Rhode Island.

US Poker Prediction: Rhode Island will legalize online gaming no sooner than 2018.

Illinois (GamblingCompliance estimate 2018-2020)

Illinois is another state that could leapfrog some other contenders in the next couple years.

The state has already legalized online lottery sales, and this expansion has started paying massive dividends. The success of Illinois iLottery might accelerate the state’s timeline for online casino and/or poker.

There hasn’t been any recent iGaming expansion talk, but there has been some in the past, so the framework for a bill has already been laid.

US Poker Prediction: Illinois could legalize online gaming as soon as 2017.

Ohio (GamblingCompliance estimate 2018-2020)

Obama Legalize Online Gambling

A bit of a dark horse on GamblingCompliance’s list, Ohio looks like a good candidate on paper, considering the state has a strong brick and mortar casino industry and is looking for new revenue streams.

However, there has been little public mention of iGaming expansion in Ohio to date.

Furthermore, gaming expansion (of any kind) has been a hot-button issue. Current Governor John Kasich tried to expand gaming in the state early in his tenure by adding video lottery terminals at seven of the state’s racetracks, but the move has been met with stiff resistance and is currently being settled in court.

Online expansion would likely meet a similar fate, and with the Governor entertaining runs for higher office, it’s unlikely he’ll want to talk about iGaming until after the 2016 elections.

US Poker Prediction: Ohio will legalize online gaming no sooner than 2018.

Should More States Legalize Online Gambling Laws

Photo by Niklas Morberg used under license CC BY-SA 2.0.

Should More States Legalize Online Gambling Sites