Since the early 1990s, online gambling has exploded in popularity. In 1996, there were fifteen gambling websites. By 1997, there were over 200. In 1998, Frost & Sullivan reported that the industry surpassed $830 million in revenue. The first online poker rooms also came on the scene. In 1999, the US Senate introduced the Internet Gambling Prohibition Act, which would have banned online gambling for U.S. citizens. In the same year, multiplayer online gambling was introduced.
Today, gambling is legal in forty-eight states, including the District of Columbia. However, there are a number of states that have not legalized online gambling, or at least do not have full regulatory frameworks. For example, the states of Delaware, Hawaii, and Wisconsin have varying degrees of regulations for online gambling.
Some jurisdictions have enacted laws to regulate Internet gambling and impose taxation. However, these new laws will not allow betting exchanges. Federal prosecutors have warned that internet gambling operators may face criminal prosecution if they don’t comply with existing laws. As a result, they are taking measures to protect players from government repression.
Although there is no comprehensive law governing online gambling, the industry generates jobs and tax revenue for the governments of the jurisdictions in which they operate. However, some states do not regulate Internet gambling sites, which makes it difficult for residents to play at offshore sites. Therefore, legislators should look into the issue and consider making laws that stop tax revenue from spilling over to offshore gambling sites.