States edge closer to online gambling for revenue

States edge closer to online gambling for revenue
By Oregon Tax News

As states struggle to balance their budgets, they constantly search for new ways to increase revenue and decrease their deficits. Although there is a federal ban on Internet gambling, several states, led by New Jersey, battle to legalize online gambling by initiating state laws that could circumvent a federal ban on Internet gambling.

New Jersey is the first state to authorize online gambling. Although Republican Governor Chris Christie vetoed the bill, gambling experts believe states’ efforts to legalize online gambling for their own residents, known as intrastate gambling, are increasing. Iowa lawmakers followed New Jersey and introduced a bill to legalize online poker, and California and Florida are considering similar bills.

States have the authority to maneuver around the federal ban by limiting access to the online sites to people using them from inside the state. Proponents believe this is not only technologically possible, but also financially viable. However, opponents argue that some state constitutions may not provide such exceptions and may not have the ability to circumvent the federal ban.

This is not the first time states have considered legalizing online gambling. In 2002, Nevada passed a law legalizing online gambling, but the Justice Department advised the state not to not proceed with adoption of the law.

More recently, Illinois passed a law that allows wagering online through the state lottery, and is currently waiting on a ruling from the Justice Department. Minnesota and a variety of other states already offer limited online lottery betting. Therefore, depending on the various state constitutions, some states may have a higher likelihood of succeeding a federal Constitutional challenge than others.

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