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Go broke gambling – in the comfort of your own home

Post by TNT Editorial Board / The News Tribune on Jan. 1, 2012 at 3:07 pm |
December 30, 2011 2:17 pm

This editorial will appear in Monday’s print edition.

Good news for American gamblers. Someday soon they won’t have to get dressed and go to a casino to lose their money. They’ll be able to sit at home and legally throw it away – and many states will gladly help them do it.

Now that the Justice Department has reversed its longtime position against online gambling, expect to see a lot of states quickly move to start selling lottery tickets on the Internet – at the very least. Nevada and the District of Columbia are already poised to license online poker websites, and others are likely to follow suit.

Several states have been pushing for a relaxation in online gambling restrictions. The DOJ now says that the federal 1961 Wire Act only applies to online sports betting, opening the door for states to sell their own lottery tickets online and license gambling websites – for a piece of the action, of course.

The temptation will be too great not to take advantage of a rich new money source at a time when revenues are still falling and demand for services is greater than ever. That kind of thinking is behind a proposal by some of this state’s Republicans to allow non-Indian casinos to offer slot machines and other games. Expect more pressure in this state to at a minimum sell lottery tickets online.

Sadly, any additional gambling revenue from online gambling or expansion of slot machines will disproportionately come from people who can least afford to lose money: the low-income, the young and the compulsive. They have always been the big losers with gambling, but with state-backed online gaming they will have a faster, more convenient way to go broke.

Some will argue that people are already gambling online, losing money to unregulated, predatory casinos. So why not allow states to capitalize on the market, regulate it and keep the profits here, paying for state services instead of enriching some offshore casino owner?

It’s hard to come up with a persuasive rebuttal to that argument. But here’s one: States shouldn’t be fleecing their most vulnerable citizens simply because lawmakers want to avoid difficult choices regarding revenue and budget cuts.

Many problems are likely to arise if states get into online gambling, including: How will they limit play to their own residents? How will they prevent tech-savvy kids from gambling?

It’s been estimated that online gambling will raise about $12 billion a year in revenue for the states. Already the annual cost of gambling-related crime and financial distress is almost $7 billion, according to the National Council on Problem Gambling, and about a half million teenagers are considered to be addicted to gambling. Those numbers are sure to increase should it become easier to gamble online.

States that do get into online gambling should at least set aside much of the revenue they receive from it to address the social costs created by this questionable windfall.

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