[tangled]

You're right the states will likely just opt out.

Legislators are biased against gambling more than the general public, because FOF-type voters are much more likely to weight gambling issues more heavily than pro gambling voters. FOF types are motivated by paranoia and threat of divine judgment. They see gambling as a threat to society, or a threat to “the fabric of the family” as Frist said. In addition, they believe that God himself wants the wickedness of gambling to end and will make judgement day difficult for believers who fail to fight against gambling expansion. Pro gambling voters put gambling issues way down on the list of things that are important when voting. To put it simply, in general, it is politically safer for politicians to be against gambling expansion than for it.

Internet gambling has been painted as being particularly evil and destructive. Like it or not, their catch phrases about clicking away your house and the crack cocaine of gambling have been very effective.

Internet gambling interests have lost every single legislative vote that has occurred and have lost them in landslide proportions. This is why the Wexler bill is far superior to IGREA because it does much less to tempt or provoke the individual states’ legislatures to take up the issue.

As far as the tax issue: Legislators value political survival even more than increased revenues. Further, the monies that will be available do not represent “Rake” but “ Rakeback”. Our opponents will argue that states lose more money than they get back, and that that difference would have generated tax revenue as well as economic benefits if it was kept within the states and not lost to out-of-state gambling bosses (their jargon). Also, states will likely see internet gambling as a threat to the money that they bring in from the gambling they already peddle.

Yes, there has been an expansion of gambling within the states in the last 20 years but that has been caused much more by a stick than by a carrot. There has been an increase in the number of Native American Casinos in the last 20 years, and pro-gambling forces have used that to argue that people are going to these casinos , leaving their money, and only bringing back the problems that gambling causes. If states allow casinos in their own states, they argue, than at least there will be money available to treat problem gamblers. They have effectively turned around the issue of problem gamblers as a pro gambling argument and not an anti gambling argument.

This dynamic has played out vividly here in Kansas. For 15 years pro casino interests have tried to get the legislature to expand gambling to allow casinos. The legislature has steadfastly resisted this initiative despite popular polls showing that the people strongly favor casinos. Then, one year recently, there was a huge shortfall in the school budget that the legislature did not want to make up. The Kansas Supreme Court stepped in and required the legislature to make up this shortfall somehow. This was a big problem for the legislature, a problem that gambling expansion would have solved. Still, the legislature refused to allow casinos. Many people thought that if the legislature did not approve casinos that year, then they never would. Then Native American Casinos went up all over in Oklahoma sucking a great deal of money from Kansas. Finally, the legislature approved allowing the voters to approve casinos. And within a few days of this positive legislative action, Missouri started considering liberalizing their own gambling scheme citing the expansion of gambling in Kansas as the reason.

The stick is more powerful than the carrot in gambling issues. Just pointing out the tax money that internet gambling will bring in is not likely to be enough. A more compelling argument is to point out that people will gamble on the internet anyways, and at least legalizing gambling will keep some of that money within the state. Also, we should do everything possible to get the decision to opt out or in decided directly by the people. States with referendum laws are much more likely to do this (a la Tuff Fish).

But of course the Wexler bill is still best.