At a time when states are struggling to make up lost revenues, online gambling is starting to look like a safe bet.
Last month, New Jersey became the third state after Delaware and Nevada to legalize Internet gaming with legislators in other states such as California, Pennsylvania and Illinois moving to introduce similar proposals.
“I think that, generally, states that have already established casino industries will be more likely to begin offering online gambling sooner,” said Doug Walker, an economics professor at the College of Charleston who’s studied the effects of legalized gambling.
The growing prevalence of online gambling marks a sea change in the overall attitude toward the business and what activities should be allowed on the Internet.
With this acceptance comes tremendous financial opportunities in a lucrative area of e-commerce that until this year could only flourish abroad. Delaware became the first state to enter the realm of legal online casino gambling in June 2012.
Before the Obama administration eased federal restrictions, online gambling was widely viewed as a business ripe for criminal enterprise. The lawlessness of the web made issues of fairness and propriety relevant. Players put themselves at risk of credit card fraud, identity theft and other financial crimes by disclosing their personal information online.
Now considered less shady as a result of the legal opinion issued by the Justice Department in 2011, online gambling seems poised to generate an economic boon.
Shares for gaming giant Zynga soared this year after the company expanded its online gambling businessoverseas. Meanwhile, shares of rival Glu Mobile jumped 18 percent last week after announcing it would begin offering a real-money slot game for mobile phones through a partnership with London-based gambling service Probability.
The new state laws have sent online gambling companies scrambling for real estate in Delaware, Nevada and New Jersey as a result of provisions allowing virtual gaming as long as it’s affiliated with land-based operations.
In Atlantic City, the online gaming giant Pokerstars is trying to buy a casino-hotel where it could anchor its Internet business.
Similar bills have been introduced in the legislatures of Pennsylvania and Illinois. Two bills have beenintroduced in the California state Senate that would legalize online gambling there.
The administration of Gov. Chris Christie in New Jersey anticipates the law will boost casino tax revenue by $200 million in the next fiscal year.
What impact all of this will have on the physical casino industry remains to be seen, Walker said.
“It’s difficult to predict what the overall effect of legal online gambling will be on the land-based casino industry. There is little evidence yet,” he said. “But I consider online gambling and casino gambling to be different products. The casino experience is a social experience. Online gambling may be more convenient, however. We could see the two acting as substitutes or complements, and the relationship could be different in different gambling markets.”
This article was originally published by Tech Page One, a portal for technology news and culture powered by Dell.