In a move that could bring legalized online gambling back to the U.S., Nevada has awarded online gaming licenses to two companies, International Game Technology, based in Reno, Nevada, and Las Vegas-based Bally Technologies Inc., which both said they intend to supply games to casinos rather than compete with them. Bally expects it to be available by the end of this year or early next.
Moreover, the state of Delaware is also on the verge of voting on whether to legalize online gaming, making it the second state after Nevada (plus Washingtn, D.C., which has since repealed its law) to legalize it.
Internet gaming was made illegal in September, 2006 under a Republican-led Congress through a law that banned financial institutions from handling transactions made to and from Internet gambling sites. The U.S. federal government has been seizing the domain names of sites it believed were involved in online gaming.
However, the Justice Department last year issued a ruling that implied online gaming within a state's borders was legal, and that states could make agreements among themselves to offer online gaming. Nevada did so last year, under the leadership of now-Governor Brian Sandoval, a Republican. Ten states, including New Jersey, are working on such legislation, Bloomberg reports.
States are interested in online gaming due to the money they hope to make, especially in the recent economic downturn. Online gaming may reach $13.4 billion in five years, according to researcher H2 Gambling Capital. "Online gambling accounted for $32.8 billion in revenue worldwide last year, the largest contributors being Japan, the U.K. and Germany, according to Simon Holliday, an H2 Gambling director," writes Bloomberg. "Analyses by Wells Fargo and other financial firms indicate passage of federal legislation could lead to a $20 billion annual market online in the U.S. within five years," according to an article in the Nevada Appeal. The gaming industry itself predicted in 2009 that legalized online gambling in the U.S.could raise $48 billion in revenue over a ten-year period. In addition, IGT expects to create 400 jobs. ;
Gaming officials and others are hoping that the federal government legalizes it as well, which would make its status more clear. Representative Barney Frank, D-Massachusetts, when he was chair of the House Financial Services Committee, introduced such legislation in 2009, after introducing similar legislation in 2007. Senate Majority Leader Harry Reid, D-Nevada, and Sen. Dean Heller, R-Nevada, also support online gaming legalization.
Republicans (other than ones from Nevada) have traditionally been against online gaming, with Utah (along with Hawaii) being the only state with no legal gambling, while Democrats have tended to be more laissez-faire about the issue, chalking it up to a matter of personal responsibility. Consequenty, these efforts may give online gaming aficianados another reason to be interested in November's election besides betting on the outcome.