Betting on US Online Gambling

Online gambling has grown rapidly in the past 10 years, and a planned merger between the UK's PartyGaming PLC and Austria's Bwin Interactive Entertainment AG would create a gambling company with an estimated $885 million in revenue. But the "whale" for online gambling has always been the US.

Unlike in the UK, where bookmakers line the high street, gambling is highly proscribed in the US. And online gambling has been illegal ever since the October 2006 passage of the Unlawful Internet Gambling and Enforcement Act. With the US government facing fiscal challenges, moves to legalize aspects of online gambling have started to gather pace. On July 28, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act passed the House Financial Services Committee, meaning it could be voted on in the full House. Congress's Joint Committee on Taxation estimates that legalized online gambling could raise more than $40 billion in new tax revenue over a decade. It is this tax-revenue opportunity that can no longer be ignored, said Bill Lerner, an analyst at Union Gaming in Las Vegas. "It's a matter of when it will happen, not if it will happen. It would be regulated, first at state level," he said, where it could develop traction to become legal on a national level.