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Feds give OK to online gambling, but it is not likely to happen in Idaho

Feds give OK to online gambling, but it is not likely to happen in Idaho

Mitch Coffman
January 2, 2012
January 2, 2012

In mid-December, while most of the country was preparing for the holidays, the United States Department of Justice (DOJ) quietly reversed its decision regarding the 1961 Wire Act. The DOJ says the act applies to online sports betting, but not other forms of gambling such as online poker or tickets sales.

This could potentially open the door for states to allow online gambling within their borders. But, in Idaho, there may not be a chance for online gambling, no matter how open the door is, according to two state legislators and the director of the Idaho lottery.

While the ruling may be meaningless in Idaho, it is full speed ahead in other areas. Nevada and Washington, D.C., are expected to start online gambling, mostly in the form of poker. In Illinois, the hope is to create more revenue from online ticket sales, and in Kentucky the governor has begun the push to expand gambling to generate more revenue.

According to Jeff Anderson, executive director of the Idaho State Lottery, there are no plans to even suggest looking into the issue in the Gem State.

Anderson said that if such plans were to be considered, other facets of the state lottery system would need to be taken care of. “It depends on how it would be structured. We want to make sure that we’re sensitive to the brick and mortar retail network for the basic scratch games. And, we would need legislative and the governor’s approval and we have not suggested that we go down that path in Idaho. But, we do support states’ rights for those that wish to do so.”

Rep. Vito Barbieri, R-Dalton Gardens, believes that with the current “environment” in Idaho, the likelihood of something such as online gambling happening is slim, at least for the near future. “I don’t think it is possible in Idaho, at least not in the present (political) environment. I would look at it closely to see if it would be something that I would support. But I don’t see, at least for this coming session, that popping up. It seems to me there are too many other issues right now that have got the Legislature pretty much involved and I don’t think that online gambling is going to be something that will come up this session.”

However, Barbieri didn’t completely rule out the issue being considered at some point, saying, “The thing that militates for doing that (online gambling) is the state’s desperation for funds, and their ability to tax those winnings. So, it could be that the issue would have to come up as the state continues to look for new resources to fund bureaucracies. It’s not something that you would definitely want to write off in the future, but I would say it won’t happen in the present environment.”

Indeed, revenues from online gambling are estimated to $12 billion a year for states and their respective lotteries, according to Rick Bronson, chairman of U.S. Digital Gaming. Though, some estimates place the dollar amount closer to $5 billion.

Regardless of the estimates, Rep. Marv Hagedorn, R-Meridian, believes that Idaho should not head in that direction for additional revenues, but should instead focus on other areas. In an email to IdahoReporter.com, Hagedorn said, “I think that the other states’ ‘rush’ to get that business will result in few dollars for them as that market is already pretty much saturated with private companies already offering the same services (many outside the U.S. borders that have never had to worry about U.S. laws over the Internet).”

Hagedorn sees opportunities for added revenue for the state without resorting to some form of online gambling. “Idaho needs to have a revenue source that is not a ‘me too’ type of business,” says the lawmaker. “We have the potential for natural gas production royalties that could substantially add to our state revenue helping offset income and sales taxes in the future. We need to think outside the box and not follow the crowd in how we look for revenue needed to provide for constitutional state services.”

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