[lemart5]

LONDON (MarketWatch) — The news over the holiday weekend is that the Obama administration may be moving towards legalizing online poker.

An opinion by the Justice Department’s Office of Legal Counsel, written in September but only published on Friday, may open the door to online poker once again. It argues that the federal Wire Act may only prohibit betting on things like sporting events.

Poker has been subject to a crackdown since President George Bush signed the Unlawful Internet Gambling Enforcement Act in 2006.

If this is reversed, investors can expect a gold rush into online poker companies. To cut to the chase, one of the stocks to watch is bwin.Party Digital Entertainment UK:BPTY +19.65% , traded in London. It is a market leader overseas, has a clean balance sheet, strong profits, and a joint venture ready to go with two big U.S. companies.

Online poker was promising to become a very big deal before 2006. Even though the industry had only been around for a few years it was already growing fast and had hit critical mass.

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At the time the biggest operator, PartyPoker, was handling 32 online poker hands a second, and $125 million in wagers a day. Nearly all of that was in the U.S. Its revenues had rocketed eighty-fold, to nearly $900 million, in four years.

The crackdown caused its stock to collapse. Even though it was an overseas company, it ended up paying Uncle Sam $105 million in settlement to atone for the sin of taking U.S. bets.

There are reasons to think the door to online poker may be opened again.

Forget the “positive reasons” — like freedom, pursuit of happiness, or the absurd hypocrisy of our gambling laws.

The real reasons are negative.

State governments are desperate for revenue. Yet taxpayers don’t like paying taxes. They want paved roads, educated (sort of) fellow citizens, police, and clean air. But they don’t really want to pay for them.

As a result, state governments are raising revenues through other means. One of their favorites? Gambling.

It’s the only tax Americans don’t mind. Indeed it’s the only tax Americans actually line up to pay. The same people who will scream blue murder over $50 in extra taxes will happily drop $1,000 in slot machines or on lottery tickets without a whimper.

States everywhere are licensing more casinos and slot machines. They are selling lottery tickets as fast as they can.

[MartinBlank]

Legalized internet gambling is coming------

By this time next year, I can see multiple states with fully regulated online poker rooms.

[hels]

Legalized internet gambling is coming------ By this time next year, I can see multiple states with fully regulated online poker rooms.

That's how the US should do. Create a monopoly and rake in the cash.

[k13]

I'll believe this rush when I see it.

[Chimneyfish]

That's how the US should do. Create a monopoly and rake in the cash.

Why? As long as we're speaking in hypotheticals that will never happen, we might as well just say that government should get out of everyone's business completely and let people make their own decisions. A poker room that is run like the DMV sounds horrible. The greatest era in offshore betting was when there was essentially no government regulation, resulting in such a saturated market that every book was trying to outcompete all the others with bigger bonuses and better service.

I'm looking for less government involvement with gambling- not more.

[KKoz9]

This will be the worst thing to ever happen in the U.S - like anything the bloated, inefficient government sticks their nose into.

Don't forget there will be an 18 month black-out or somesuch so that Uncle Sam can further intrude into our lives by making the ISPs filter/censor sites out of our existence under the guise of "regulation".

[nyplayer33]

Tis hould of been done years ago..it has been legal and TAX FREE IN THE UK FOR YEARS

[MartinBlank]

Why? As long as we're speaking in hypotheticals that will never happen, we might as well just say that government should get out of everyone's business completely and let people make their own decisions. A poker room that is run like the DMV sounds horrible. The greatest era in offshore betting was when there was essentially no government regulation, resulting in such a saturated market that every book was trying to outcompete all the others with bigger bonuses and better service.

I'm looking for less government involvement with gambling- not more.

That is ridiculous.

Does Las Vegas work?

I would say it does-----I have yet to hear anyone bitching about how Vegas works.

Do you think Vegas exists without government regulation?

Anyone who cries about government regulation being bad for gambling needs to explain how and why it works so well in Las Vegas.

I'll be waiting for that explanation.

[jjgold]

wont happen or will be real scaled down

usa can never ever compete with aussie and europena gambling

[Chimneyfish]

That is ridiculous.

Does Las Vegas work?

I would say it does-----I have yet to hear anyone bitching about how Vegas works.

Do you think Vegas exists without government regulation?

Anyone who cries about government regulation being bad for gambling needs to explain how and why it works so well in Las Vegas.

I'll be waiting for that explanation.

I never said that gambling doesn't work when government regulation is involved. I said that it works better when there's less government as opposed to more government. If anything, Vegas proves my point by the fact that it's a city that thrives on the advantage of having less strict gambling laws than the rest of the country. I specifically pointed out that I think an offshore industry completely free of regulation is a hypothetical and impossible scenario, so I'm not sure why you would think I was implying that it is the only scenario.

[gregm]

I Nelson Rose has a fantastic blog on his site about the wire act and the implications, I'd like to see an interview with Rose on SBRTV about this.

[Grits n' Gravy]

It will happen and the big gaming companies like Caesars, MGM and Wynn will boost their coffers from it.

Vegas has pretty strict gambling laws if you know them. Casinos often find loopholes to accommodate players when they need to. I would much rather play in Vegas than a tribal run casino.

[Chimneyfish]

The reason why tribal casinos are usually so horrible is because they can often use their territorial rights to ensure that there is essentially zero competition in the surrounding area. The greater extent of competition in Vegas results in incentives to provide better service in order for businesses to stay afloat, regardless of regulations- just like how offshore shops were offering larger bonuses back when there were much more of them in operation. That is why I think it would be a terrible idea for the US government to have a monopoly on gambling.

[MartinBlank]

The reason why tribal casinos are usually so horrible is because they can often use their territorial rights to ensure that there is essentially zero competition in the surrounding area. The greater extent of competition in Vegas results in incentives to provide better service in order for businesses to stay afloat, regardless of regulations- just like how offshore shops were offering larger bonuses back when there were much more of them in operation. That is why I think it would be a terrible idea for the US government to have a monopoly on gambling.

I don't think anyone is suggesting it is going to be a federally regulated enterprise.

It will be a states' rights issue, and the regulation will be on that level, not from federal legislation.

The "legalization" will simply be a federal mandate eliminating UIGEA.

[Chimneyfish]

I don't think anyone is suggesting it is going to be a federally regulated enterprise.

Here is the quote that I was responding to:

That's how the US should do. Create a monopoly and rake in the cash.

[FuzzyDunlop]

Massive difference between this administration 'paving the way' for online poker in theory or them 'creating a loophole by publicizing an interpretation of a law that doesn't make INTRAstate online wagering federally illegal'.