WHITTIER, CA -- Leading gambling law expert I. Nelson Rose of Whittier Law School here said he predicts a "big explosion" of states legalizing Internet gambling because state governments face severe revenue shortages. | SEE STORY
Legislatures in 10 states including Illinois, Ohio, Iowa and Kentucky have reportedly said they may favor legalization of online lottery sales or Internet poker. The National Conference of State Legislatures released a letter on March 2 stating the organization's desire for the U.S. Congress to avoid legalizing online gambling nationwide, in order to leave the matter up to individual states. | SEE LETTER
Up to $100 million could be realized in new state taxes in Iowa alone, where a Senate subcommittee recently approved SB Bill 3164, an Internet gambling legalization bill.
The potential boom in online gambling legalization by states is being triggered by new guidelines from the federal government. In December 2011, the U.S. Justice Department announced it was changing its decades-old position on Internet gambling and that states could legalize the activity for citizens within their own jurisdictions, without violating the 1961 federal Wire Act.
Yet federal prosecutors continue to indict owners of offshore Internet casinos and sports gambling websites that target American players. In 2011, the DOJ shut down Pokerstars.com, charging its owners with money laundering and wire fraud. As recently as this February, the feds indicted the owner of bodog.com, one of the world's largest online sports gambling companies.