When Will Americans Be Able to Gamble Online ?

On February 26th New Jersey became the third state to legalize online gambling. Other states that have legalized interactive gambling are Delaware and Nevada. While Nevada plans to limit online gaming to poker New Jersey and Delaware plan to offer players a selection of games including online bingo, keno, blackjack, roulette and other casino and table games.

Unfortunately the effects of legalization will take some time and it will be a while before Americans can log on to a gambling site and play their favorite games legally. Jennifer Webb, an analyst for Gambling Compliance, which tracks the global gambling industry, answered several questions by a reporter for Bloomberg BusinessWeek.

When asked when Americans can start gambling online Webb said “Until online gambling goes live, it’s definitely still illegal." States need to sort out the processes leading to sites going live. Licensing procedures must be worked out and testing online gambling platform technologies will be a high priority . Nevada, where only poker will be offered, will probably be the first state to begin operations in early 2013.

Delaware, where online gambling will be supervised by the state's lottery, plans to go live by September 30th. Webb says that New Jersey will probably be online before the end of November.

Many wonder how states can place boundaries regulating online gaming activity. The laws state that players must be physically located within each state where online gambling is legal. States will probably use software that tracks a player's location.

New Jersey may require players to register in person at Atlantic City casinos.

Many are still worried about the federal government because of past actions such as the infamous 'Black Friday' in 2011. Webb says that “Conventional wisdom now is, as long as online gaming is intrastate—within the state—and has proper geolocation and age verification, that it’s in compliance with federal law. If it’s legal in New Jersey and legal in Nevada, and they have an agreement, then you could have pooling between the states.”

Many wonder who will be running the gaming operations. In Nevada and New Jersey online gambling licenses will be issued exclusively to brick and mortar casinos. Some casinos have formed partnerships with internet gaming companies that will provide the software and gaming platforms. States hope to benefit from taxing online gambling. Webb stated “The revenue estimates [for New Jersey] have ranged between $175 million and $1.5 billion." New Jersey's tax rate will be 15%.

Other states considering legalization include California, Hawaii, Massachusetts, and Iowa.