Apparently, a piece of legislation passed the House making it illegal for credit card companies and banks within the United States to take payments for online gambling operations. This effectively shuts down online gambling’s most lucrative market. The legislation in question, H.R. 4954, is a bill dealing ostensibly with ports security. The two biggest supporters of the gambling legislation, John Kyl (AZ) and Jim Leach (IA), are both from states with legalized riverboat and Indian casino gambling. Prospective Republican candidate and Senate majority leader, Bill Frist, is also a major supporter. (When he runs for president it would be worth researching his campaign donations to see if any tribal money made it in there.) The legislation is also supported by diverse interests like the National Football League, but more speculation on that shortly. If I were a cynical person, I would suggest that this shutdown is simply a precursor to legal online gambling, which will work out in the following steps:
Step 1: Shut down all illegal online gambling in the United States. This is complete as of this week, provided it gets signed into law. If online gambling companies cannot take bets from within the United States they will lose tens of billions of dollars. Gamblers have no way to pay the sites because the sites can no longer legally process their bank or credit cards directly. Brick and mortar casinos are the winners here as they have been extremely unhappy about the competition from the online market where they were prohibited from operating due to existing laws. They have been shoveling buckets of money into the war chests of their distinguished representatives in Congress for over ten years.
Step 2: Brick and mortar casinos ghost-write and support legislation for the regulation of legalized Internet gambling. Shortly after online gambling is outlawed. It will return in a legal form. Essentially, the casinos will make deals with the state and federal governments to accept regulation in return for significant tax revenues, cooperation with money-laundering investigations, etc. I imagine the casinos might try for concessions tying online customers to the physical casino through various mechanisms. For example, requiring customers to create accounts in person (presumably for age verification), storing funds in casino accounts, or even making online gamblers play online only in approved gambling facilities. This would allow the casino business to open up legal online gambling terminals in bars, truck stops, airports, etc. Las Vegas will then be available across the country 24/7 and the state governments will be guaranteed their piece of the action. It may sound outlandish, but the gambling interests are very serious and long-range thinkers.
What stake does the NFL have in this? Their support may be a result of their desire to keep sports betting from negatively affecting their all-American image, however what if American society has grown more tolerant of gambling? What if the NFL ran its own online book-making operation? The odds could be determined by the marketplace, and the NFL could take a cut of all the bets made all while providing an open and authoritative eBay-style book-making marketplace.