With Budgets Tight, States Seek Greater Gambling Revenue
As election time nears, political leaders are searching for ways to generate enough revenue to balance state budgets. The struggling economy has caused income to fall far short of revenue forecasts, as fading business pays less tax on lower trade.
As has been a rule of thumb in recent years, many states are eyeing loosening gambling restrictions to create new revenue streams, or enhance those that exist. Colorado and Missouri both have ballot issues regarding raising maximum bets, and Colorado is also voting on expanding operational hours.
Ohio is considering licensing land casinos, and Maine is debating the creation of a major casino resort in the north part of the state. Maryland is continuing the seemingly endless discussion as to whether slots should be allocated to state race tracks.
All these efforts, plus past recent ballots which brought more slots to California and Pennsylvania, are designed to raise money to run state governments. Yet, it seems the biggest revenue source available is being ignored.
Online gambling offers a huge potential source of revenue for both the nation and individual states. While states may be leery of collecting taxes from businesses that operate in defiance of the UIGEA, the statute does not prevent any state from taxing the industry.
Neither does it make online casinos illegal. It simply makes payment transfers illegal, but in undefined terms which will surely be repudiated by the next Congress.
In the meantime, Barney Frank's office has estimated as much as $40 billion annually could be reasonably collected from Internet gambling sites. Why a state desperate for revenue would chose to block online gaming rather than tax and regulate it is a mystery.
