A Major Turned

It is expected that the debate over online gambling will only intensify. In 2005, worldwide online gambling revenue reached over $10 billion.  At least 80% of the bets that were placed in the U.S.  Of course the problem is that online gambling is not legal in the U.S. Even though U.S. laws go mainly without enforcement, they have required big online casino providers to be listed on the London Stock Exchange--as BetOnSports.com, SportingBet, and PartyGaming have accomplished and are required to operate from such shadowy tax-havens as Costa Rica and Gibraltar, in a effect daring U.S. officials to prevent them from operating. The Arizona Sen. Jon Kyl is at the head of a charge to put an end to Internet betting sites permanently, but the pro-online casino lobby is just as strong.

The Nonconventional Wisdom
The charge for legalizing online betting will be led by Las Vegas casino companies. There are those who believe that companies like Harrah’s Entertainment and MGM Mirage (nyse: MGG - news - people) will stay away from Internet betting in order to protect their gambling licenses. This is not the case. They have a lot that they can gain—but also lose--in this war. If online gaming were to be legalized, casino moguls like Sheldon Adelson (Las Vegas Sands (nyse: LVS - news - people )), Steve Wynn (Wynn Resorts (NASDAQ: WYNN - news - people )), and Terri Lanni (MGM Mirage (nyse: MGM - news - people )) will be able to use their world-famous brands--and their expansive customer databases--to quickly drive up revenues. If they remain on the sidelines, an increasing number of people could do without fancy weekend-gambling jaunts to Sin City for more conventional betting online. It will be the Las Vegas casino companies that will lead the charge for the legalization of online betting.

The Out of Line Assumption
That online gambling will always be a shady business. The reality is that in the case of most online casino operators are simply begging Congress to regulate--and even tax--their operations. With this they are able to tap the liberal poker and sports-betting markets with no fear of being shut down. Another mislaid assumption is that online gaming is a trend. This is positively not the case. On a daily basis, more hands of poker are played online than in all of the world’s casinos combined. And American customers are spending about 20 times extra on betting than they expend downloading music, and ten times additional than online porn.

The Observer List
-- Arizona Sen. Jon Kyl: The man foremost in placing charges to get rid of Internet betting sites permanently, indicating moral and addictive reasons why the business should be blocked.
-- SportingBet : Company Chief Executive Officer Nigel Payne is one of the civic faces of online gambling, lobbying to anyone he can about the advantages of regulating the industry. The outfit manages  ParadisePoker.com, yet another popular poker site.
-- PartyGaming: Owns PartyPoker.com, definitely one of the world’s for the most part popular poker sites. Despite a thriving market and with its public offering in June, its creation of four new billionaires, the company’s stock has gone down by 13% since.
-- MGM Mirage: Chief Terry Lanni lately said that if online gambling was legitimate, MGM Mirage would rapidly double its $6 billion in revenue. That’s saying a great deal for a company that owns some of the world’s major casinos, including the Bellagio, Mandalay Bay and MGM Grand.
-- Harrah’s Entertainment: Recognized for emphasizing technology and having made benefit of an enormous database of players, Harrah’s would do extremely well if regulations were approved.
-- Las Vegas Sands: Owner Sheldon Adelson has most of his concentration focused on Chinese gambling mecca Macau, where he is a partner with other hotel concerns to create the Cotai Strip, China’s version of Sin City. Given the opportunity, Adelson will definitely play over the Internet.
-- Wynn Resorts: Like Adelson, Wynn is mostly paying attention to Macau. But Las Vegas’ most identifiable mogul won’t pass up an opportunity to work online.

The Daring Prediction
At the latest, Internet gambling will be regulated by 2007. Lawmakers will be required to take morals out of the online-gambling deliberation and tax, regulate and license the industry--as they have done with vices like alcohol, land-based gambling, pornography and cigarettes. Everyone is a winner: Online casino companies are surely going to grow, land-based casino giants will enter into these markets and the government will witness added tax revenue.

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