US Land Casinos Keep Eye on Online Casinos
Major American media, including the
International Herald Tribune and Bloombergs started the week with some
interesting reportage suggesting that U.S. land casino companies were
increasingly considering online casinos as a new alternative for revenue
growth. The reports came after the American Gaming Association’s recent
call for a congressional committee to study online casinos rather than
imposing the immediate ban on online casinos that some legislators would
like to see. The reports named MGM Mirage, Harrah's Entertainment Inc.
and other U.S. casino operators and said that there is increasing
pressure on Congress to consider legalizing online casinos. The online
casinos industry has reported healthy profits in the past few years, but
online casinos are untaxed by the government, and of the thousands of
online casinos, many are set up in offshore tax havens like the
Lobbyists and spokesmen for the big brands in land gambling are quoted
as saying that the best way to control the $12 billion online casinos
business, based offshore while drawing more than half its revenue from
the U.S. - is to regulate and tax it. "The argument the industry is
making is, if it is being done offshore, why not bring it in to the U.S.
so it can be regulated?" says Sen. John Ensign, a Nevada Republican who
has discussed the online casinos issue with representatives of Las
Vegas-based Harrah's, the world's largest casino owner. "It doesn't look
like you can ban it."
The companies, which according to Federal Election Commission records
have so far contributed more than $900,000 to congressional candidates
in this fall's elections, are pushing lawmakers to take a first step
toward legalization of online casinos by creating a federal commission
to study it. Ensign and Senate Minority Leader Harry Reid, a Nevada
Democrat, say the online casinos proposal has a chance of clearing the
Senate this year. Meanwhile, Republican representative Bob Goodlatte and
Democrat Rick Boucher, are pursuing legislation to force U.S. financial
institutions to cooperate with federal law-enforcement authorities in
shutting down the flow of cash to online casinos based outside the U.S.
The House Judiciary Committee is scheduled to take up the online casinos
measure this week, and Majority Leader John Boehner says he intends to
bring it to a floor vote later this year.
Even if the measure passes the House, it would face long odds in the
Senate, says Matthew Gerard, an online casinos industry analyst at
Investec Securities in London. "Ultimately, we think it will be very,
very difficult to get any prohibitive legislation through the Senate,''
he says. The Justice Department continues to investigate and prosecute
online sportsbooks that accept funds from U.S. customers. On May 17,
prosecutors in Washington announced money-laundering charges against two
people who operated an Internet betting parlor in Antigua. In addition
to making campaign contributions, the U.S. casino operators have
reportedly retained some of Washington's top lobbying firms, including
Patton Boggs LLP and Barbour Griffith & Rogers, to promote their