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[January 31, 2014]
Big Bets on Internet Gaming [State Legislatures]
(State Legislatures Via Acquire Media NewsEdge) The nation's first legal gambling website debuted in Nevada this April, and Delaware and New Jersey have just followed suit with their own online betting games.These states were first, but it's unlikely they'll be the last. Lawmakers in California, Hawaii, Illinois, Iowa, Massachusetts, Mississippi and Pennsylvania introduced online gaming measures this year, and more are expected to follow. Brick-and-mortar casinos are licensed in 18 states, up from six states in the early 1990s, and the increased competition has flattened revenues. Casino owners, as well as state tax offices, hope to recapture some of that lost revenue by being first to the gate with online gaming.
Americans spent $37.34 billion on casino gambling in 2012, with companies returning $8.6 billion in taxes and fees to states and local communities, according to the American Gaming Association. The three states' projected tax revenues from online gaming vary widely, as do their tax rates. Nevada collects 6.75 percent of online gaming revenues and anticipates tax revenues around $3 million this year. New Jersey collects 15 percent and hopes to bring in $35 million to $180 million.
Delaware, where all gambling operations are state run, collects 43.6 percent of online slots revenue and 29.4 percent of other online games. The state expects its share of online revenues the first year to be only $3.75 million, but Delaware officials plan to join other states to offer bigger jackpots and attract more players, which should increase revenues.
Nevada limits online gaming to poker, at least for now. Ultimatepoker.com, which opened its virtual doors on April 30, dealt more than 2 million hands the first month and is credited with boosting the May earnings of its parent company, Station Casinos, 11.4 percent over last year. Gamblers must be at least 21 and in Nevada to play. They can use smartphones or personal computers as long as they've opened and funded an account. Nevada's regulations allow it to join others states to increase the online player pool, similar to lottery games such as Powerball or Mega Millions.
In New Jersey and Delaware, gamblers have a choice beyond poker. Websites also offer roulette, slots, blackjack and more. Several of Atlantic City's 12 casinos have worked with international companies that run online betting enterprises in the roughly 85 countries that have legalized it-the first being the twin island Caribbean nation of Antigua and Barbuda in 1994.
Other states are taking a cautious approach. Pennsylvania, for example, has two online gaming bills, one in favor, and one opposed, both being reviewed by the Pennsylvania House's Gaming Oversight Committee. Representative Tina Davis (D) introduced a bill to establish guidelines and regulations to attract more Internet gambling. A month later, Representative Paul Clymer (R) introduced a bill to ban online gambling, citing "the serious problems of gambling addiction and the related social problems that would occur" if Internet gambling were legalized. As many as 9 million adults and 500,000 adolescents in America have problems with gambling, costing the country $7 billion annually in crime and bankruptcy, according to the National Council on Problem Gambling.
(c) 2013 National Conference of State Legislatures
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