The Legalization of Internet Gaming

Large U.S. casinos are seeing dollars signs with the potential to legalize Internet gambling but neighborhood casinos are seeing problems. Small, local casinos in Nevada comprise most of the gaming halls in the state of Nevada which has the world’s largest concentration of casinos. There is already enough competition amongst land-based casinos; adding legalized Internet gaming could be disastrous.

Why this is an Issue

Local casinos make their money through convenience of reaching a small, localized market and building strong, lasting relationships with their customers. Adding online properties to the mix will result in the biggest brands acquiring the most customers thus phasing out smaller competitors. It’s a simple matter of economies of scale. Those that offer the largest service will continue to expand, grow and attract more customers.

Supporters of Legalization

The primary supporters of the legalization of gambling include foreign-based gaming websites, celebrities, no-name poker players, a few U.S. casino companies and recently the American Gaming Association (AGA) who is lobbying for tough licensing requirements. A select few in Congress have argued that prohibition is ineffective and U.S.-based players are simply spending their money overseas which is continuing to hurt the American economy.

The Las Vegas Culinary Union supports the legalization of online poker. Additionally, gaming giant Harrah’s Entertainment supports online gaming.  Harrah’s commissioned a study in 2009 that concluded the legalization of online gaming could triple the industry as opposed to hinder it. The study was based on the continued growth of Internet poker rooms; European growth and U.S. retail chains that have boosted sales following the launch of Internet stores.

In the past 10 years, it is proven those businesses that have not adopted the Internet as a medium of growth have died out and those supporters have shown vast growth and expansion. This is an excellent opportunity for older casinos to cater to the younger crowd using technology as its medium.

The Opposition

Few U.S. casinos have someone in Washington lobbying for legalization. 14 California tribes that own and operate major casinos are against the bill stating the tribal members will suffer because of extra competition. Additionally, the nation’s largest poker room, Commerce Casino, is against online wagering. The Nevada Resort Association has not yet taken a position on the matter. They represent large casinos at the state level.

The legalization of online gaming has been a long, heated debate. The mechanisms in place to stop problem gamblers or those underage have been minimal. On the other hand, through prohibition the U.S. is losing out money that is being pumped into foreign markets. The country is at crossroad and a firm decision must be made.