Online Gambling Could Become State's Rights Issue

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Online Gambling Could Become State's Rights IssueIn the United States online gambling has been a legal grey area since 2007 when the Unlawful Internet Gambling Enforcement Act went into effect. The law said that banks, credit card companies and third party payment processors were prohibited from processing transactions related to online gambling. There has been a bill in congress since 2008 that would legalize internet poker but the law has not been put to a vote. Gaming companies are frustrated with the lack of action in congress and are pinning their hopes on individual states. After the Justice Department ruled that only sportsbetting is illegal online several states announced plans to launch their own online gaming sites. The federal law would only legalize poker but states are free to offer other games such as online bingo, keno and casino and table games. In many states the lottery will be in charge of online gaming.

Terry Rich, the director of the Iowa Lottery, believes that the lottery has the right to offer online poker and other casino games to Iowa residents. Rich warned lawmakers that the Iowa lottery may face competition from the federal government. In a presentation to the Iowa Legislature's House-Senate Government Oversight Appropriations Subcommittee Rich said that studies indicate that about 150,000 Iowans are already playing poker online and are spending almost $40 million annually on sports betting and internet gaming.

In the past Iowa lawmakers have considered the idea of online gambling but have never approved of online gambling. Rich does not believe any legislative action is necessary. Rich stated "We believe we have the authority to do most of our games on the Internet." Rich explained that under a plan by Senate Majority leader Harry Reid control of online gambling and the revenue generated would go to Nevada casinos. Reid's bill, which was opposed by the National Governors' Association, died during the lame duck session of congress. Rich expects Reid to reintroduce the bill.

If he does it could become a state's rights issue. Rich stated "The Legislature should decide what gaming goes on in Iowa, not the federal government. We want the decision made by this body." It has been hard for regulators to gauge the amount of online gambling taking place in Iowa. Rich said that during the past five years several Iowa residents sought help for problem gambling. Many identified online sports betting and online gambling as their primary forms of gambling. A 2011 report said that if internet gambling was legal Iowa would take in $13 million to $60 million yearly.

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