Does Obama Stimulus Foreshadow US Based Online Gambling?

The European Commission, which has been investigating claims of such discriminatory practices against online casinos now faces a broader attempt b y the US to favor domestic products.

The new economic stimulus package being advanced by the Obama administration utilizes a "Buy American" provision that makes casino industry analysts wonder if US  gaming companies will get advantages in licensing over established foreign online gambling sites. According to a report by CNN Money, the $819 billion package encourages protectionism of American products against overseas competitors.

The European Commission, which has been investigating claims of such discriminatory practices against online casinos as raised by the Remote Gaming Association, now faces a broader attempt b y the US to favor domestic products. The Commission announced on Thursday the intent to challenge the provision if it becomes law.

Economists also note the restraining effect such a rule would impose on the economic recovery, as firms are forced to buy more expensive domestic products rather than cheaper foreign alternatives. Yet, many of the overseas products are cheaper because the labor pools work for amounts significantly below the poverty line, a situation not tolerable for US workers.

Land casino operators such as Harrah's and MGM Mirage have been speculated as potential entrants into the Internet gambling scene when US laws are reformed, and may be given preference in licensing and regulation over more established foreign online casino operators. The creation of jobs and the staunching of the flow of funds out of the US could make the passing of laws legalizing online gambling an easier sell.

Also, fears of money laundering may be more easily quelled if gaming operators are domestic in nature. While proper regulation should soothe such concerns regardless of which country a casino bases in, voters may resonate with the concept of keeping things in US control.

Still, experts are saying protectionism exacerbated the recession during the Great Depression. General Electric spokesman Peter O'Toole said, "We believe it invites reciprocal restrictions on U.S. exports. We're in a globalized world - we can't turn back the clock."