Casinos Rethink Opposition to Online Gambling

| by Reason Foundation

By Jacob Sullum

The New York Times reports that American brick-and-mortar casinos are warming to online gambling—primarily poker, which they think can generate new revenue without cannibalizing their existing business too

much. The Times says the American Gaming Association is "working on a proposal that would ask Congress to legalize at least some form of online gambling." Companies such as Harrah's have supported legalization for a while, but now even naysayers such as Wynn Resorts seem to be coming around:

A gambling industry analyst, Sebastian Sinclair, said that a change of heart among casino operators like Wynn Resorts should not be surprising, given the stakes involved. One of the Internet poker industry’s biggest sites, Pokerstars, which operates on the Isle of Man in the Irish Sea, has estimated annual revenues of $1 billion, according to Poker Analytics, a consulting firm in New York.

"When any industry is confronted with something of this nature, a game changer that is a paradigm shift, the first reaction is to circle the wagons to protect your business," Mr. Sinclair said. "But then, that changes over time."

Now that the casino industry is rethinking its opposition to online gambling, the Times says, so is Senate Majority Leader Harry Reid (D-Nev.). Whatever legislation ensues is likely to be less liberal than the bill sponsored by Rep. Barney Frank (D-Mass.), which would legalize all gambling except sports betting at the federal level while allowing states to ban some or all games within their borders.

I analyzed the futile federal crackdown on Internet gambling in a 2008 Reason article. In April I noted the possible life sentence faced by Daniel Tzvetkoff for helping Americans play poker online. What is now a felony treated as harshly as murder may soon be a new profit center for Harrah's and Wynn Resorts.