Online Sports Betting in the USA

The recent global economic downturn, teamed with the government’s need for additional revenues, has brought the idea of legalized online gaming to the fore in the USA. Proponents believe a licensed, regulated, and taxed online gaming industry would bring much needed revenues and jobs to the USA. On the other hand, opponents argue that legal online gaming would hurt Las Vegas, Biloxi, Atlantic City; and also produce a pandemic of problem gambling that yields higher costs to society in general.

At the moment, the status of online gaming in the USA is in a relative state of limbo. If there were a “waiting list” of the most likely gaming industry candidates for government approved online gambling, it would be the following: skill gaming, online poker, online casinos, and finally online sports betting.

Skill gaming and poker are definitely on the verge of some sort of legal status in the USA. Many have successfully argued that poker is a game of skill, and that online poker, by extension, should therefore be treated much like any poker operation in Las Vegas or Atlantic City. As it stands, the “World Series of Poker” is already a national phenomenon that has captured the interests of many Americans. It is broadcast on ESPN, the nation’s foremost sportscasting network.

Online casinos are next in line, but there would be some more red tape than poker. With online casinos, it would be necessary to regulate the industry and also ensure the general public that gaming companies are operating fair online casinos. There are lots of stories about rogue offshore casino operations that abuse their players, or otherwise cheat their way to a profitable bottom line. This reality, teamed with the need for some sort of regulatory body, puts legal online casinos a little further off in the distance for US citizens.

It should be noted, however, that Goldman Sachs, a major investment bank, recently stated that it believes online gaming will be approved in the USA, eventually, in the near term. Meanwhile, Barney Frank – D Massachusetts, chair of the house banking committee, has already put legislation in the works for legalized and taxed online gaming (poker and casino only) in the USA.

Finally, that brings us to online sports betting, the black sheep of the gambling family. In the past couple of months, legal land based sports betting has been approved in Delaware, and lawmakers in New Jersey have filed suit in Federal court to get sports betting approved in their state. Beyond these breakthroughs and sparse sports betting operations in Las Vegas, most lawmakers are opposed to any form of legalized online sports betting.

This is due mostly to the fact that major sports leagues, like the NFL, MLB, NBA, and NHL are lobbying legislators heavily against what they foresee as a potential nightmare for sports in the USA. In addition, most of the voting public doesn’t necessarily approve of sports betting, but to be fair, most of the general public has not be informed of all the ramifications of legalized sports betting operations either.

Most importantly, without a doubt, there is a strong concern about legalized sports betting and University sports, currently governed by the NCAA. The NCAA argues that legalized sports betting will taint players, allow organized crime to rear its head in college sports, and potentially deter some segments of the public from college sports that are against sports betting on moral or religious grounds. Essentially, the NCAA looks to include everyone, opposed to potentially alienating groups of sports fans and athletes in the USA.

In the end, it really comes down to money and income for the federal and state governments. Frank’s online casino and poker bill promises additional revenues for the government, but the issue of state-level online gaming prohibition still stands in the way. Many states currently outlaw online gaming entirely, and Frank’s legislation would only further muddy the waters.

As a result, the future of online sports betting is unclear. Without a doubt, offshore operations will continue forward, because there is a strong interest in betting on sports in the USA. Whether or not that interest “moves home”, however, is yet to be seen.

For the moment, keeping sports betting at arm’s length somewhere in Costa Rica or the Caribbean seems to assuage concerns that legalized online sports betting in the USA would somehow create a morass of potential problems. On the other hand, some argue that an impact on pro sports and college athletics, if any, would have already been noted because offshore operations have been in business since the late 1990s. Therefore, since no negative effect has arisen that has clearly hurt sport, the introduction of “clean” businesses in the USA would not necessarily ruin athletics either.