INTERNET GAMBLING - SHOULD IT BE LEAGAL IN THE USA?

I've been following closely for months the cheating by Internet casinos. "60 Minutes" had a lead story not too long ago about how online poker cheaters were able to see the hands of other players. And two weeks before writing this Publisher's Letter there was an article in the Las Vegas Review-Journal (R-J) sub-headlined "Internet sites lack regulation, do little to police cheating." Then, the next day, in a two-part article in the R-J written by a columnist for the Washington Post, the headlines were "online wagering regulation murky" and "critics: "laws ridiculous, impossible to enforce."

An earlier article, in the Las Vegas Sun, commented that the new Obama administration appears friendlier toward the prospect of legalizing Internet gambling.

The American Gambling Association, the online gambling industry's premier trade and lobbying group, according to a LV Sun article, has "to work through at least three viewpoints. Some casino companies support federal regulation of Internet gambling. Other members want the authority to rest with the states," while "still others, fearing competition from land-based casinos with online outlets, oppose regulation that would open the door to new rivals. The group's largest members, MGM, Mirage, Harrah's Entertainment and International Gaming Technology -- which have been or are involved in Internet gambling ventures in countries where it's legal -- support legalization."

Democratic Kentucky Governor Steve Beshear, who is leading a state effort to block online bets, said the Internet gambling industry is "an underworld wrought with scams and schemes." But, Executive Director John Pappas of the Poker Players Alliance, a Washington lobbying group claiming just under one million members, said: "Congress shouldn't try to make criminals out of people who have taken the game [poker] from the kitchen table to the computer table."

So, what's the long-run verdict going to be? I certainly don't know, but as I have been saying for some time now, after the new administration takes over, I believe the ban against Americans playing on the Internet will be overturned. How long this will take, and with what restrictions, no one can know at this time. There are other things going on now in the U.S. and the rest of the world that are much more critical and require immediate attention.

Eventually, I believe, Internet gambling will be legal for U.S. residents -- but with some form of regulation. Democratic Representative Barney Frank of Massachusetts has introduced a bill to regulate online gambling sites by exempting licensed operators from the federal ban and creating protections against underage gambling, compulsive gambling, money laundering and fraud.

All these online gambling cheating and even horror stories make the case for legalizing, regulating and taxing the revenues of the owners and/or operators of the sites.

We'll see. I'll keep you posted as new developments occur.