Bloomberg and USA Today Taking Sides on Online Gambling

As New Jersey begins its full launch to allow regulated online gambling to NJ residents, two major media sites went public with regards to their stance on online gaming in the country.

USA Today published an an editorial a few days ago headlined “Internet Gambling Is a Bad Bet: Our View,” and just 3 days ago, Bloomberg published an article titled “US Should Go All In with Online Gambling,” which argued a polar opposite viewpoint.

The essence of the Bloomberg article is that online gambling should be legal, but is of the belief that a state-by-state approach to facilitate online gambling to US residents is not the way to go. Bloomberg sided with pro-online gambling lobbyists in saying “Online gambling, like everything else on the Internet, is inherently interstate commerce.”

As it stands right now, only regulated states, such as Nevada, Delaware, and New Jersey are permitted to allow online gambling within their own borders. Even though there are rumors that some states are considering partnering with other states to offer internet gambling, according to the Bloomberg editors, this approach has many foreseeable challenges ahead to be addressed. For one thing “a game such as poker requires significant pools of liquidity,” and this is certainly going to be a challenge in smaller states.

For example, states like Delaware, Nebraska, and Vermont would likely never have state-based online poker rooms flooding with traffic if the player pool only consisted of players from within the state. Hence the reason that lawmakers have made sure to include the possibility of multi-state online gambling through gaming compacts with other states/jurisdictions that have gone down the path of allowing a regulated online gambling environment.

Even when liquidity isn’t a huge concern, each U.S. state will have a a very different online gambling regulatory framework, and so the technicalities to allow online gambling under this framework will be complex and challenging.

There is also the payment processing issue that needs attention, which as New Jersey found out during its soft launch, is of real concern, as some baking institutions are still denying perfectly legitimate gambling transactions for the simple reason that it’s gambling related in nature, and the chance that a gambling transaction may be approved to minors or people who are not actually within that state.

The article pointed to two bills in Congress in saying that a better approach would be to offer a federal framework for online gambling by legalizing all forms of online gambling (except sports betting), allowing states to opt out if they have no desire to allow online gambling to their residents.

On the other hand, USA Today in its editorial piece said in no uncertain terms that online gambling should have no future in this country. In order for “Congress to rise above its current dysfunction and pull the plug” all that lawmakers need to do is refer to “the 2006 law, and a 1961 law,” which specifically apply to all forms of online gaming. Of course, the 2006 law is referring to the UIGEA.

The USA Today editors stance is receiving support from Las Vegas Sands CEO and Chairman Sheldon Adelson, who has plans to launch an anti-gambling lobby next month. Both USA Today and Adelson believe that the ease of access to virtual casino gaming could increase the rate of problem gamblers if people with addictive personalities could play all forms of online gambling on their smartphones, tablets, or desktop computers.

The issue of online gambling has been a hot topic among lawmakers and since a regulated online gambling industry is relatively new, with France the first country to go down this path back in 2010, this means the effects it can potentially have on society among other issues are still fairly unknown. But now with three U.S. states allowing online gambling within their own borders, the discussion about this issue in the United States is sure to continue.