U.S. Government Still Chasing Its Tail

So a huge crackdown has once again sent shock waves through the online gambling industry. The FBI sent this release out yesterday and it is apparent the US government continues to chase its tail when it comes to the issue of online gambling.

In 2006 the crackdown was one that I unfortunately had a front-row seat for. The Department of Justice got the blood it wanted out of that proceeding but other online sports books still operated and only slight changes were felt with online casino and poker sites (a few of the major players in those sectors stopped taking "action" from US-based consumers). There were plenty of other options for US consumers to still get action online.

Behind the scenes it did force most executives from these companies from traveling to the US and most of their vendors (if they were smart) were also outside of America. The once exception was Full Tilt Poker who brazenly had offices in California for the last several years.

Fast forward to April 15, 2011 and once again charges have been filed and arrest have been made. The three largest poker sites that accept play from US consumers have been forced to stop doing so, but once again others still remain (BoDog just to name one).

Reports project that US consumers spend $6 BILLION a year gambling online. In a "free market" system if there is a demand of that size, there will always be someone, somewhere, who will take the risk to ensure that the demand is met.

The government can decide if they want to get serious about dealing with this growing industry and license and regulate it (i.e. tax the hell out of it), or continue to make headlines every couple of years by indicting and charging executives and getting million dollar judgments from the companies.

As long as there is $6 billion in play, operators, banks, software companies, and others will ensure they get Americans to hand over their money to them so they can gamble online. Does the government want that money going into the hands of thugs and mobsters as they will no doubt get more and more of the pie now? Or do they want to have it go to legitimate businesses with well-schooled executives leading them who are more than willing to pay heavy taxes and give the government a huge influx of needed revenue?

So far the answer is clear, they are perfectly content to keep chasing their tale.