New Jersey, Nevada and Delaware legalise online gambling- is New Delhi listening?

In recent developments over the past few weeks, three US states have passed Bills legalising online gambling. The tiny and politically insignificant Delaware was the first state to legalise various forms of online gambling by passage of a Bill in 2012. Operations are yet to begin from the state though applications for licenses have already been issued.

Earlier this week, Nevada passed a Bill legalising online gambling through a licensing system. This Bill authorises the Nevada government to enter into pacts with other governments regarding regulation of online gambling. Though there are apprehensions that Federal Laws regulating online gambling may prevent states from passing such a Bill, states are relying on a Department of Justice (DoJ) letter in 2011 stating that the Federal Wire Act 0f 1961 applies only to online sports betting.

New Jersey also passed a Bill legalising online gambling offered by casinos through a licensing system. The passage of the Bill in New Jersey was highly controversial with Governor Chris Christie rejecting the Bill passed by the Senate and Assembly and finally agreeing on a compromise after much back and forth.

When three important states in USA have passed a Bill legalising online gambling and some others are likely to follow suit, these are important lessons for policy makers in India for the following reasons:

• The important regulatory changes in USA indicate a shift in attitude of law makers and increasing willingness to regulate and earn revenues from online gambling. USA has traditionally banned online gambling and even prosecuted online poker websites, but this is a positive development and is an indicator that governments see online gambling as an opportunity of earning huge revenues.
• Sikkim, the only Indian state to have passed a Bill to legalise online gambling can also follow a similar model of co-ordination with other states while allowing licensed online gaming websites to “go live.” The Bills passed by the three US states will inspire Sikkim and other states to implement changes in online gambling laws.
• The federal structure of USA is similar to that of India. In both the countries, gambling is traditionally legislated upon by the state. However internet gambling has been a contentious issue. Both USA and India have federal statutes that prevent online gambling. However, passage of Bills by the three states indicate that state legislatures still hold the key in deciding whether or not to regulate online gambling, at least as far as intra-state gambling is concerned.
• Hopefully the Union and State governments in India will wake up to these wave of changes in USA and other countries and accept gambling as a reality- no country can do away with the gambling phenomenon; governments can only hope to tax and regulate it. Law makers in India should take this lesson from developments in USA.

PS- A copy of the Nevada Online Gambling Bill as passed can be accessed here, while a copy of the New Jersey Online Gambling Bill is available here.