Reasons Why iGambling Will NOT Expand to Entire US

Wednesday, August 7th, 2019 | Written by James Guill
Reasons Why iGambling Will NOT Expand to Entire US

The online gambling industry are experts at hyping their product. We can state this as industry professionals. If you listen to a lot of experts, an online gambling expansion is about to explode nationwide and soon all 50 states will have sports betting with online gambling soon to follow.

While that sounds great, the reality is that it’s just not realistic. Online sports betting will continue to experience tremendous growth and online casino betting will expand, but not to the levels one thinks. Today, we will look at some of the reasons why an online gambling expansion will NOT spread to all 50 states.

Intrastate Networks

One reason why online gambling is so prevalent in countries around the world is that online casino sites can access the entire country. That’s not the case for the average “regulated” online casino site. Online casino sites operate as ringfenced sites, meaning that an online gambling site in Pennsylvania is only accessible to those physically located within Pennsylvania.

While this can still be a profitable venture for online casinos and online casino companies, for smaller states the expense vs profitability ratio may not be enough to bother with the venture. The only regulated intrastate network in existence is the online poker network between New Jersey, Delaware, and New Jersey, and that may not continue past 2019.

The Federal Wire Act prohibits transmissions of bets across state lines, and while a judge has ruled that this only applies to sports betting, the Department of Justice is expected to appeal this ruling, and if the appeal is successful, a shutdown of the interstate network is likely.

Misinformation Amongst Lawmakers

Ignorance can be a dangerous weapon, and one of the biggest roadblocks to online casino regulation in most states is misinformation given to lawmakers about the online gambling industry. This misinformation ranges from claims that online gambling will cannibalize live casino gambling to claims that it will increase problems gambling.

Other misinformation comes in the form of undervaluations of online gambling networks and the revenue they can bring in. Often, lawmakers believe the misinformation more than the factual data that presently exists from states like New Jersey. This causes roadblocks that eventually block the passage of bills.

Anti-Gambling Culture

While many states have one form of gambling or another, there are some states that are resistant to online gambling. States such as Hawaii and Mississippi are examples of states where both lawmakers and citizens are staunchly against online gambling. Other states such as Florida have held public referendums where citizens actively voted against an online gambling expansion.

Then there is Iowa. Iowa is the only state in the nation that has effectively made online gambling illegal forever. While some states have laws prohibiting online gambling, Iowa is the only state that has already passed legislation to opt-out of any potential federal online gambling legislation.

Federal Legislation Will Not Happen

Back in 2006, online gambling supporters have been claiming that the United States Congress will be passing some form of online gambling legislation. Fast forward 13 years, and it has never happened. To the contrary, there has been more movement on anti-gambling bills than pro-gambling bills.

Online casino gambling is considered by many to be a state-level issue, and a federal measure would be viewed as encroaching on state’s rights. As such, lawmakers have been largely unwilling to move forward with the measure.

Online gambling regulation is also an unpopular political topic and some lawmakers overlook the issue rather than have to deal with the potential political fallout. While matters such as the Federal Wire Act will be handled by the federal government, state-level matters like online gambling legislation will continue to remain at the state level.