Cracking Down on Online Gambling Is Wasteful

In an apparent crackdown on online gambling, the US government froze $30m in online gambling winnings of around 27,000 people.  In the past, the government had only gone after gambling processors and betting companies.  Some how, legislation banning online gambling was attached to the Patriot Act following 9/11, forcing all of the online gambling sites to go offshore, mostly to Costa Rica and the Carribbean.  In 2003, PayPal had to pay a fine to the government for processing online gambling payments.  Since 2006, the US has been arresting online gambling executives if they come to the US.  These laws and crackdowns have not stopped online gambling.  In fact, online poker and sports betting has grown dramatically in spite of the legislation banning gambling.

Online gambling has grown into an even more shady industry as the payment processors and site opporatores have been forced into the shadows.  There have been numerous cases of payment processors simply walking away from their obligations and stealing gamblers’ money.  There are also questions about whether pokers sites are fair and whether the sites can be hacked.  In the most publicized case, someone was able to hack into a poker site to see everyone’s cards and win at unprecedented rates.  Players guessed it could have been the site itself or an employee, but they could not prove it.

Online gambling is one of the Internet’s biggest growth industries.  Its a huge waste of resources to go after this industry that has a clear demand in the US.  If the US legalized online gaming, it would be able to tax the $9-12 billion dollars per year that the companies make, plus the government would be able to collect taxes on gambling winnings that are not reported right now.

Opponents of online gambling say that gambling is addictive and its easier to become addicted and spend too much money if its as easy as inputting your credit card information.  They say that gambling is wrong and immoral.  If gambling were legal in the US, the government could regulate how much and how often a customer puts money into gaming websites.  They could also regulate the payment processors and gaming websites to make sure that they are fair and not in the hands of shady characters and criminals.  In the beginning Las Vegas was run by the Mafia and other unsavory characters.  Online gaming is at the same stage right now.  The US should legalize online gaming, regulate it and tax it.  It would bring needed revenue to the government at a time we are running record deficits.