Great article on the Gambling Ban

If you're interested in the Unlawful Internet Gambling Enforcement Act, (if you're reading this blog I assume you are) check out this article. Here is a portion of the article:

"Prohibition is not the answer -- regulation isIn Monday's HG Daily (for Hidden Gems subscribers only) regarding the effect of the legislation on Cryptologic, my colleague Jim Gillies noted a lecture on Al Capone and his role during Prohibition from a recent trip to Alcatraz:
"Prohibition's effect on alcohol prices was said to be on the order of a 275-fold increase within a year, and almost zero decrease in consumption of the now-illegal product. Does anyone believe that Americans en masse will stop gambling online, especially since there won't be any penalties for players? (Yeah, me neither.)"
Americans will continue to play online poker, albeit at a reduced rate (Americans still have brick-and-mortar card rooms to turn to). But that's not what the U.S. government should be concerned about; in my opinion, the real issue is that U.S. citizens account for the bulk of the $13 billion worldwide online gaming industry, yet the U.S. government receives zero tax dollars. And it's not because the online casino operators are nefarious thieves -- for the most part, the publicly traded online gaming companies are reputable businesses regulated by the respectable stock exchanges in the U.K. The reality is that the U.S. online gaming market is so profitable that these gaming companies would gladly share their profits and pay taxes in the U.S. By one estimate, the U.S. government is losing $3.3 billion in online gaming-related tax dollars to foreign governments.
And if Americans are going to play poker online anyway, doesn't it make more sense to legalize online gambling and regulate it, rather than make a futile attempt to ban it?
Direct parallelsThere are direct parallels to this in the domestic casino market. In Council Bluffs, Iowa, for example -- which is located directly across the river from Omaha -- Nebraskans deposit the bulk of the nearly half a billion dollars in annual gaming revenues generated by the three casinos owned by Harrah's Entertainment (NYSE: HET) and Ameristar Casinos (Nasdaq: ASCA). While Nebraska is loath to legalize full-blown casinos, Nebraskans are going to gamble anyway, and it's inevitable that one day, the state will decide that its residents might as well deposit gaming tax dollars in Nebraska, rather than Iowa.
Similarly, rather than watch its residents spend all of their gambling budgets in New Jersey, Pennsylvania legalized as many as 61,000 slots at 14 locations in the state, which the state expects to generate $3 billion in gaming revenue, more than half of which will be paid back in taxes. Ohio faces a similar predicament, as Penn National's (Nasdaq: PENN) Argosy Lawrenceburg -- located in Indiana, roughly 25 miles across the state line from Cincinnati -- is the industry's most successful riverboat casino, partly because of the absence of real competition. The pending introduction of slots in neighboring Pennsylvania will likely speed up gambling legislation in Ohio, in an effort to keep gambling tax dollars within the state.
It may be a little sad that these states are somewhat forced, in a way, to legalize gambling, but it makes sense. What can you really do when the propensity to gamble is as human as the propensity to imbibe alcohol?
In my opinion, the regulation of online gaming seems to makes a heck of a lot more sense than an attempted ban. It's just not clear to me who this bit of legislation truly benefits, except perhaps a number of politicians up for election in November."
-From Motleyfool.com Oct 3.