In spite of all the attempts of the US government to look to curtail online gambling among its residents, online gambling has survived all of this and while it has indeed been curtailed quite a bit over the years, it’s still alive and well today.
It’s not that the U.S. government has not enjoyed a fair bit of success here, and while we may claim that they did not stop it as they may have wished to, and this is actually an overly ambitious and unrealistic goal, they have managed to beat it down quite a bit, thus far anyway.
Most online gambling sites will not touch the US market with a ten foot pole now, and it’s not even legal reasons that are behind it, they just don’t have the stomach for it as it turns out, as the government has made some quite successful efforts to make life more difficult for both players and operators.
So it’s important to give credit where it is due, and due to these efforts, the market is only a fraction of its potential, if online gambling were wide open across the country and was also allowed to be actively promoted to its full market value.
We’re not exactly sure of the exact numbers of how much gets spent on online gambling per year in the United States, but some estimate that Americans wager more than $400 billion dollars a year on sports betting alone, which gives you the sense that even as curtailed as it is, it is still a huge industry.
This does not even count what’s spent on casino and poker, which is still a thriving industry. Poker has really taken a hit and has some unique challenges, but the online poker industry has been growing since the days of Black Friday and while it is still well behind where it was prior, it’s made a nice comeback.
Those who think that the RAWA is going to have a magical effect upon online gambling in the U.S. need only look at the sports betting numbers, and the Wire Act clearly has always applied to sports betting, and this is all sports betting that is interstate in nature, but we still see all this online sports betting going on in spite of this law.
Still though, a lot of people have been kept out of the market, as well as a lot of operators, due to the government’s propaganda efforts, looking to intimidate and confuse. So there is much potential for growth here, especially if regulated online gambling comes closer to its potential here.
The Prospects for Regulated Online Gambling in the U.S.
Many people have hoped for a federally determined solution to all this, not fully appreciating that this is much more of a state determined affair, where internally regulated online gambling goes anyway.
States decide whether gambling is legal or not in their state, and also decide under what conditions operators are to be licensed, so they must agree to any regulation suggested by the feds. The feds could put together an opt in scheme that states could agree to and participate, and we’ve already seen bills that sought to attempt such a thing, but that may be several years off at best.
Ideally, states and the federal government would co-operate here, and this would be the best case scenario for both, giving them both a say in how the regulations would be written. There’s not much disagreement here though, these regulations are all pretty similar, in the United States and elsewhere, with the major difference being how much they will charge operators for licensing fees and the taxation rates that are to be applied.
There are two main components of this, the willingness to regulate, and the ability to work out a suitable regulatory scheme, and it’s the first component, the willingness, that’s been the biggest obstacle, although we’ve seen the second part be a stumbling block as well, for instance with California’s struggle with reaching an agreement on this.
Progress is being made, albeit very slowly. We’re still stuck at 3 states out of 50 that have regulated online gambling, and it was thought that more would be on board by now, and it still may just be a matter of time before some of the more gambling friendly states get on board.
The Goal Needs To Be To Regulate Internally More
We often see the term unregulated being used to describe online gambling sites that originate outside the U.S., but the truth is that these sites are all regulated, they just aren’t regulated in the United States.
So there’s plenty of regulated gambling going on so to speak, and the sites that offer play to Americans have it in their regulations that they can do so, the same way that an American regulated body would.
These sites tend to be regulated with the same concern and scrutiny as domestically regulated online gambling sites, although domestic regulation can offer players additional feelings of security as well as expectations of more effective dispute resolution, so this is on the plus side of having more of this.
Markets tend to expand more with domestic regulation, and sites are freer to use conventional media to advertise, if it’s permitted within the regulations, and often it is.
When the money is allowed to flow offshore without the government getting its cut through taxation, this is something that effects their bottom line, and governments typically run on big deficits and have big appetites for tax money of course.
So the upside of domestic regulation for the government is that they can directly license and influence operators, and benefit economically as well, so you would think that this would be a no brainer for them, if they were thinking pragmatically, but they don’t tend to near enough.
The nature of computing and the internet takes the playing experience off the grid for all practical purposes, this is not a matter of seeking out and busting up land based games, as online gambling is beyond their reach.
They can look to ban certain gambling sites but people just get on a virtual private network and easily get around that. This hasn’t been done in the U.S. but several other countries have learned the futility of this.
They can look to prevent financial transactions, and the U.S. has done exceedingly well with this, but you can’t eliminate them all, and with the recent growth of Bitcoin as a payment method for online gambling, this has the power to take these payments completely off the grid.
Online gambling continues to grow, and is unstoppable really, and governments need to stop pretending they can make it go away, and instead accept it as a reality and admit that they cannot effectively stop this and it will go on anyway with or without them, but it’s better for everyone that it be with them.
So in time we should indeed see more and more regulated gambling by the states in the U.S., but it may take a while to get there, and in the mean time, the beat of online gambling simply goes on.