The gambling laws in the United States do not make much sense. Then again, many laws in many places have more to do with tradition, history and personal whims, and therefore can seem odd when looked at with a fresh eye. Gambling laws, however, are counterintuitive and cost the government millions in potential revenue.
There are arguments that certain states use in order not to open casinos. They tend to be nimby arguments, and while we do not agree with them necessarily, we understand why they exist. Then there are others, namely dealing with online gambling, that make no sense whatsoever.
As it stands now (and this may change since it was written), online gambling is illegal. Online betting is legal, as long as the bets are not on sports. Any bets on sports can of course be made in Las Vegas, Atlantic city, OTB venues and the Kentucky Derby. However, it is legal to have an online gambling company based in the United States, just as long as no money passes through US banks.
The net result is that millions are being traded and gambled, and the United States is not allowed to see or tax any of it. We have already mentioned Smarkets, as well as Intrade, Betfair and the now-defunct Predictify.
We can now also mention Galileo Managed Sports Fund, the first sports-betting hedge fund, as well as Betable.com, where you can create your own bets and share them with anyone (no, not even this is allowed in the US). Do you want to bet on the nature of reality? You can, at Paddypower.com, which allows you to bet on what the Large Hadron Collider will discover (odds that it will discover God are currently 100/1). We can also mention Ultrinsic, where students can bet on achieving certain grades in their classes (as an extra incentive to reach their goals).
Merrill Lynch estimates that by 2015 online gambling will be a $528 Billion a year industry. If the US allowed it, it would be much more. During times of recession, couldn’t the state coffers do with some more tax revenue?
