In recent years, state governments have started to look toward different revenue building streams to help and increase the amount of money coming into the state. While there are many different ways for state governments to do this, one of the most looked at forms of revenue has been online gambling. Most states have some form of gambling, whether it is in the shape of a casino or daily lottery. Regardless of the form of gambling, many states are a bit cautious regarding expansion of gambling. A large portion of the country’s state governments are against the development of brick and mortar casinos. That is a major reason why online gambling has been slow to develop inside of the United States, but as recent studies have shown, these online opportunities can help bring in a large amount of money to the states.
The Ban on Online Gambling
In the earlier years of the Internet when dial-up started to make way for DSL, people throughout the United States could log onto a selection of different online gambling websites. These websites allowed them to play poker, slots and a large number of different online casino games. For years, it allowed gambling fans to play their favorite games without ever leaving the house. This eventually led to some rather large problems. First, the United States, both state and federal, could not tax these winnings as the website operators were located offshore. Beyond this though, the United States government could also not provide protection to these consumers as well. Some companies started to accept deposits and then fold up, keeping the money and more or less disappear. When this occurred, many people lost thousands upon thousands of dollars. To prevent this from happening again, the United States placed a ban on internal gambling.
More traditional casinos have started to rise up in non-traditional states around the country. Both New Jersey and Nevada have long had successful gambling cities, with both Las Vegas and Atlantic City building itself up more or less from the gambling and tourist money. Other cities have looked towards building up casinos in a similar manor. Indian casinos have sprouted up, and other cities like Detroit have built up some non-Indian based casinos to help increase revenue to the cities. Some of these have proven more beneficial to the cities than others, but ultimately each location has helped improve upon the tax based for the local community.
There have been many states that currently struggle with a tax base. Rustbelt states, such as Michigan, Indiana, Ohio, Pennsylvania and others have seen population shifts as people have started to move south or west towards warmer climates, and the downturn of the auto industry for nearly a decade significantly hurt the tax base as well. Due to this, many state governments started to run into financial problems. With these financial issues, states started to look towards other tax revenue streams to make up for the loss of dollars coming in from the citizens who left the states.
Bringing back online gambling has proven to be a very slow process, but several states, primarily those states with already a strong casino foothold, decided to open up and allow online gambling. Many of these online gambling sites are gaming specific, so some are dedicated only towards poker while others are dedicated only towards slots. Other states have watched with great interest to see how these states fair with the amount of tax revenue each is able to bring in.
The Boost of Tax Revenue
State governments had to wait for two different numbers. First, they had to wait for the amount of revenue developed and created by online gambling websites run by the local state governments and second, the states had to wait to see if the other tax revenues declined as some gamblers would move from betting in person to online. After the studies and research came in, these states did find that local casinos did see a slight adjustment and drop off in the amount of money coming in. Not significantly, but a small amount. However, the amount of money spent through the online gambling platforms was far more than what the casinos lost. This way, the states did see a nice improvement in the tax revenue. Since the initial years, states have continued to monitor this and more and more states have put forward motions in the state senates and congress to pass measures to legalize online gambling. It ultimately is going to depend on each state, but if the individual state revenues are similar to what other states are that have legalized online gambling, then the new states should start to see more money come in to help fund different elements of the state government.
In modern government, it is important to bring in money through different means without over taxing residents themselves. By allowing different forms of business to pop up that do not cost the customers more money but instead act as a different line of business, governments need to look into these different financial opportunities. A state with more money is able to invest into its infrasture, its school systems and other areas across the board. So, one way these different state governments are able to improve upon the amount of money it brings in is with the legalization of online gambling. With a large portion of the money coming in going back into the government or into the school systems across the states, it should prove especially helpful for these states to take advantage of the studies and the financial numbers and pass the right to gamble online legally. This is a law that is good for everyone.