Why the Relaxation of Federal Gambling Laws Could Be the Economic Boost We Need

Why the Relaxation of Federal Gambling Laws Could Be the Economic Boost We Need

Gambling is heavily regulated across the United States, with the rules and regulations made by each state further strengthened by federal gambling laws. Outside of Atlantic City and Nevada, gambling is severely limited. Despite these restrictions, gambling has brought in nearly $100bn in revenue yearly. In these uncertain times, could the relaxation of federal gambling laws provide the economic boost we need to avoid another recession?

Current State of Federal Gambling Laws

With the stock market in a volatile state, concerns about the stability of the economy are growing and gambling revenue could be an answer; however, the federal government has strict laws regulating gambling across the country. While each state has the authority to pass legislation on gambling, the federal government has laws regulating it as well. One of the strictest federal laws was the ban on all sports betting, with some minor exceptions, and although this was overturned in 2018, we have yet to see how big of an impact it will have.

Currently, in most states, casinos can only be operated on Native American land. Due to laws regarding Native American sovereignty, states do not have the authority to regulate gambling on Native American lands. Casinos have provided a steady stream of revenue for many tribes and enabled them to improve their overall quality of life. This perhaps shows how beneficial legal gambling can be for a community or country. Only Nevada and Louisiana allow casinos statewide.

Online casinos are also tightly regulated. In 2006, the federal government passed the Unlawful Internet Gambling Enforcement Act, which did not technically outlaw online gambling but did make financial transactions with online casinos illegal — effectively outlawing online gambling as it made it impossible for these businesses to run and make money.

State-run lotteries are the most wide-spread form of gambling in the United States, with 45 states having some form of lottery. The revenue from state lotteries is often used to fund public projects, making it the form of gambling that has the most positive image in the public eye.

Nevada as a Case Study

Nevada is home to arguably the most famous gambling location in the world: Las Vegas. The Las Vegas we know today is a fairly recent creation. As late as the 1950s, the city was still mainly run by the mafia and it wasn’t until the 1970s that the city began to explode in popularity. Martin Scorsese’s film Casino (1995) does a great job of capturing this transitional phase as the casino industry moved from one controlled by organized crime to one controlled by massive corporations.

Today, the casino industry in Nevada is glitzy and well-run, very far removed from its origins. Unlike many parts of the country, and the world, there are no restrictions on the types of games that are allowed — skill games and games of chance are both legal in Nevada casinos. This includes both card games and slot machines, as well as dice games. In 2020, the state’s casinos brought in a combined revenue of $6.75bn dollars, keeping Nevada’s economy healthy.

A European Model?

Many European countries can provide the United States with examples of how more relaxed gambling laws can benefit a country’s economy. The European Union does not have any overarching gambling laws in place. This allows each member country to determine its own gambling laws. This could be a good model for the United States, with each state free to determine its own laws without such strict oversight from the federal government. In Finland, for example, gambling is a state-controlled industry. Finnish casino comparison sites, such as Nettikasino247.com allow users to engage with global betting businesses including William Hill, but since this form of gambling is only available using foreign companies, Finns see little of the revenue generated from such activities.

France, on the other hand, has much less direct governmental control over physical and online gambling, but the high taxes and licensing fees make it a more restrictive environment. The United Kingdom has fairly relaxed gambling laws and like Finland uses proceeds from state-run lotteries to sponsor public projects.

Gambling is a massive industry that has the potential to be incredibly lucrative for the United States if it is properly regulated. If the federal government were to loosen its current gambling laws and replace them with more sensible laws, perhaps similar to the Finnish model, then it could provide the economic boost that this country needs.