Gambling has been one of the favorite American pastimes and as some people claim “Gambling is in America’s blood”. [1] Up to 1890s, different forms of gambling especially lotteries were popular. However, they were all made illegal by direct prohibition until 1920s when gambling was reintroduced to American society and this time it was more accepted due to holding bingo sessions in churches and building racetracks. Gradually different states legalized gambling and riverboat casinos, poker clubs, Indian reservation casinos, and state lotteries developed throughout the United States. [2]
With the development of Internet, traditional gambling gave way to online gambling and the first on line casino began business on August 18, 1995. Since that time, the number of online gamblers has increased drastically and today it is believed that half of the world’s online gamblers are in America.
Since the start of this new industry, there have been attempts to limit online gambling such as Internet Gambling Prohibition Act of 1997 and 1999. However, the IGPA of 1997 did not pass through the congress and that of 1999 did not become a law due to objections against it. Now, internet gambling has become a controversial issue. Should it be prohibited or legalized?
The attempts to limit online gambling show that the government does not embrace this new industry. In September, 2006, congress placed a ban on banks making payouts to online gambling services.
Some people like Ryan D. Hammer in his article about online gambling and its effect on economy argue that Internet gambling should be curbed to reduce its negative impacts on American economy. “Many state and local governments are dependent on tax revenues associated with traditional forms of gambling. However, online gambling sites are not taxable for their income nor are the gamblers who visit these sites. Thus, Internet gambling not only deprives the economy of these valuable tax revenues, but also costs the economy valuable jobs and assorted fees associated with traditional gambling.” [3] Also banks and credit card companies suffer from the results of online gambling. “Credit card charges for Internet gambling are often posted as cash advances, which carry higher interest rates than ordinary purchases. The cash advance rate for most credit cards exceeds 20%. Numerous lawsuits are filed by individuals who have lost money gambling online and who refuse to pay their gambling debts. These lawsuits could leave banks unable to collect debts from individuals who partake in Internet gambling.”[4] In addition to that “Gamblers can conduct illegal activities such as computer fraud over Internet by using anonymous name, resulting in tractability problem that is difficult to trace the identities of gamblers.” [5]
Another thing which we have to keep in mind is that the internet causes an increase in compulsive gambling, thus, exacerbating gambling addiction and gambling by minors. Despite all the problems mentioned some people like Congressman Barney Frank are still hoping to pass a bill to legalize online gambling which will provide the government with significant tax revenue and replenish the budget deficit. [6]
But, whether to legalize or prohibit online gambling still remains a challenge for President Obama who is now taking the battle of healthcare reforms.
1.http://www.associatedcontent.com/article/78658/the_legal_battle_for_online_gambling.html, retrieved on 7th Oct, 2009
2. Ryan D. Hammer. Does Internet gambling strengthen the U.S. economy? Don’t bet on it, retrieved at www.law.indiana.edu/fclj/pubs/v54/no1/Hammer.pdf on 7th Oct, 2009
3. Ibid
4. Ibid
5. http://newmedia.cityu.edu.hk/cyberlaw/gp25/intro.html retrieverd on 10th Oct, 2009
6.http://onlinecasinospotlight.com/2009/08/will-obama-legalize-internet-gambling-in-america/ retrieved on 7th Oct, 2009
With the development of Internet, traditional gambling gave way to online gambling and the first on line casino began business on August 18, 1995. Since that time, the number of online gamblers has increased drastically and today it is believed that half of the world’s online gamblers are in America.
Since the start of this new industry, there have been attempts to limit online gambling such as Internet Gambling Prohibition Act of 1997 and 1999. However, the IGPA of 1997 did not pass through the congress and that of 1999 did not become a law due to objections against it. Now, internet gambling has become a controversial issue. Should it be prohibited or legalized?
The attempts to limit online gambling show that the government does not embrace this new industry. In September, 2006, congress placed a ban on banks making payouts to online gambling services.
Some people like Ryan D. Hammer in his article about online gambling and its effect on economy argue that Internet gambling should be curbed to reduce its negative impacts on American economy. “Many state and local governments are dependent on tax revenues associated with traditional forms of gambling. However, online gambling sites are not taxable for their income nor are the gamblers who visit these sites. Thus, Internet gambling not only deprives the economy of these valuable tax revenues, but also costs the economy valuable jobs and assorted fees associated with traditional gambling.” [3] Also banks and credit card companies suffer from the results of online gambling. “Credit card charges for Internet gambling are often posted as cash advances, which carry higher interest rates than ordinary purchases. The cash advance rate for most credit cards exceeds 20%. Numerous lawsuits are filed by individuals who have lost money gambling online and who refuse to pay their gambling debts. These lawsuits could leave banks unable to collect debts from individuals who partake in Internet gambling.”[4] In addition to that “Gamblers can conduct illegal activities such as computer fraud over Internet by using anonymous name, resulting in tractability problem that is difficult to trace the identities of gamblers.” [5]
Another thing which we have to keep in mind is that the internet causes an increase in compulsive gambling, thus, exacerbating gambling addiction and gambling by minors. Despite all the problems mentioned some people like Congressman Barney Frank are still hoping to pass a bill to legalize online gambling which will provide the government with significant tax revenue and replenish the budget deficit. [6]
But, whether to legalize or prohibit online gambling still remains a challenge for President Obama who is now taking the battle of healthcare reforms.
1.http://www.associatedcontent.com/article/78658/the_legal_battle_for_online_gambling.html, retrieved on 7th Oct, 2009
2. Ryan D. Hammer. Does Internet gambling strengthen the U.S. economy? Don’t bet on it, retrieved at www.law.indiana.edu/fclj/pubs/v54/no1/Hammer.pdf on 7th Oct, 2009
3. Ibid
4. Ibid
5. http://newmedia.cityu.edu.hk/cyberlaw/gp25/intro.html retrieverd on 10th Oct, 2009
6.http://onlinecasinospotlight.com/2009/08/will-obama-legalize-internet-gambling-in-america/ retrieved on 7th Oct, 2009
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