I just saw a banner online which posts a phone number to turn in "internet gambling" sites. The banner says it's confidential. Why is internet gambling illegal in most states these days? You can't tax it!
Using the adage "if the government can't get a cut of it, it will become illegal", this sort of gaming joins drug trafficking, prostitution, and garage sales as another plague to our existence. I mean why would people not want to just leave the safety of their own homes and drive 100s of miles to a nearby bells & whistles riverboat (which pays into state and federal taxes for their existence) wasting gas and subjecting themselves to an hour or two of driving time each way?
Internet gaming sites became popular in the 1990s. Most are basically casinos and sports book companies which are based out of the Cayman Islands. You upload some software, use your debit or credit card to deposit some cash (they used to offer a percentage of an add on for each initial deposit) in your account and you are off and running. How do you get paid? After you make a profit (or have decided to recoup the rest of the money out of your account before you have lost it all) you reverse your transaction on your card or request a check. A small fee may be added on to either of these forms of payment.
As usual, a lot of players were not reporting any profit, and worse for the IRS, casino profits leaving the country were shielded by an Internet global (and somewhat nontaxable) appeal.
Were online sports books really cutting into the profits of local casinos? Maybe. But under the guise that these casinos could not be regulated (and operated as if they had some license to steal), the government laid claim that they had to be blocked for your protection.
On a personal note, I have won more money gaming online than I ever have playing any state lottery. The longest wait I ever had to get paid was around a week. There was always a phone contact number for these gaming companies and customer service was always available and top notch, especially the sports book companies that were tied into known casino franchises in places like Las Vegas.
In slow or down economic times, I can understand how slipping revenues can be a shout out to regulate an industry deemed stealing profits from legitimate tax paying ones. But this was all in the air years ago. I see it as another step into regulating and taxing sales throughout the entire Internet, all so the government can again get its piece of the pie.
Conspiracy theory? Maybe! But someday sit down with your phone bill and count how many extra local and government taxes have been tacked on throughout its summary and tell me otherwise!