The U.S. government’s attempt to crack down on Internet gambling is widely seen as a convoluted mess. Yet, more controlled and defined regulation would likely benefit the $41 billion industry and protect consumers alike, finds a new study by Michigan State University business scholars.
The study is the first to estimate the costs and benefits of the Unfair Internet Gambling Enforcement Act, which was signed into law by President George W. Bush in 2006. Despite ongoing uncertainty and confusion stemming from the law, the industry has reacted positively, with the value of publicly traded online gambling firms increasing nearly 3 percent.
“The online gambling industry is at the point where it wants controlled regulation,” said Mark Johnson, MSU finance professor and study co-author. “We conclude that both the industry and individuals – including underage and problem gamblers – would be better off if regulation exists.”
The law essentially made online gambling such as virtual poker and blackjack illegal except for “fantasy” sports, online lotteries and horse/harness racing. Although the law was passed in 2006, governing rules weren’t issued for two more years. In addition, the Department of Justice seemed unsure of its own enforcement strategy until 2010.