States May Beat Federal Government To Online Gambling Regulations
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New Jersey senators took the first step last week in changing the online gambling culture in the US. The senators approved a bill legalizing online gambling, and that approval may have opened the door to many other states exploring the issue.
The discussions have already begun in states such as Florida and California, but the depth to which the Internet gaming regulations were defined by New Jersey senators may cause other states to go into the two-minute drill regarding Internet gambling.
The most obvious reason why states would attempt to create their own regulations before the federal government is the tax rate. On a federal level, the tax rate for states would be only around six percent. By regulating the industry themselves, states could require a tax rate of upwards of twenty-five percent.
“When you look at the disparity between what online gaming operators would pay at a state level compared to a federal level, it is much more beneficial for states to beat the US government to the regulations,” said Gaming Analyst Steve Schwartz. “As more states start to understand this, there could be a major online gambling explosion in the next couple of years.”
Unless lawmakers attach Representative Barney Frank’s Internet gambling regulation bill to a jobs bill in the lame-duck session, it is unlikely that changes will be made to the current US laws in the next two years. While the issue is bi-partisan to a degree, Democrats having the majority would have made law changes much more likely.
In addition to the tax rate, states around the US will now have a model to base their judgements on. If New Jersey regulates Internet gambling with little issues arising, legislators in other states would be able to use the statistics when debating anti-gambling foes.
New Jersey legislators have also worded the law in a way that they may be able to circumvent the federal laws. By offering betting to only New Jersey residents, the state would be within its rights to authorize Internet gambling within the framework of their own laws, something other states would also be able to accomplish.