Online Gaming Takes a Hit from Congress

One of the last minute bills pushed through the Senate before their recess was a restriction on online gambling:

AMERICA’s $6 billion (£3.2 billion) internet gambling industry is facing meltdown after the US Senate pushed through a Bill at the weekend outlawing the processing of bets by banks and credit companies.

The surprise move, which is expected to spark a massive share sell-off, will prompt London-listed 888 Holdings to announce this morning that it is halting its entire US-facing operation, accounting for half its business.

PartyGaming, the world’s biggest internet gambling company, said last night that it was “still evaluating the situation”, although industry sources believe it will also announce a cessation of its services to American punters.

However Sportingbet, which was celebrating on Friday after a New York court released its former chairman, who had been facing gambling charges, will tell investors that it is still digesting the implications of the Bill.

Despite the Bill’s prescriptive nature, it excludes local online betting on horseracing, fantasy leagues and lotteries. It also has no impact on the hundreds of casinos and gambling emporia that dot America, ranging from the neon palaces of Las Vegas and Atlantic City to the riverboat casinos that ply their trade on the Mississippi.

I just finished watching the World Series of Poker on ESPN, and in nearly every shot there was a player wearing a hat or shirt with an online gaming company logo. There's a lot of money in that business, and they've taken off with the boom in poker thanks to shows like the World Poker Tour. There are now (or were) thousands of people playing online, and a few making big money doing it. It will be interesting to see how the industry responds, and whether this bill will take the wind out of the sails of the poker boom.

Although some conservatives, and especially religious conservatives, will applaud this bill, I personally wish the Senate had used that time to confirm conservative judges and get John Bolton's nomination approved. That would have accomplished far more good than this bill.