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Why We are Outraged: An Economic Analysis of Internet Gambling

8 Pages Posted: 14 Jan 2009 Last revised: 23 Dec 2013

Frank J. Vandall

Emory University School of Law

Date Written: January 14, 2009

Abstract

Why are we outraged? The United States is outraged because no taxes are paid on the $6 billion that is shipped abroad. The misery and expenses that follows internet gambling is distributed among the various states, however.

Several solutions to the lack of jurisdiction over internet gambling sites have been proposed. First, the 2006 Act forbids Internet sites from receiving money from U.S. financial institutions and forbids U.S. financial institutions from sending payments to foreign sites. Second, Ryan Landes proposes a voluntary regulation of foreign sites, who agree to reduce underage gambling and fraud, as well as pay taxes. Landes argues that these are the key problems with internet gambling. His proposal reads like a wish list for existing "bricks and mortar" casinos as it would permit them to own internet gambling sites. My proposal is related, but different.

I argue that, if the foreign site agrees to pay taxes and will work to reduce underage gambling and fraud, we will allow their "designated employees" to visit the U.S. Pointedly, I do not open the door to American casinos to operate internet gambling sites, nor propose a new agency. In the final analysis, the costs of gambling may exceed its benefits.

Keywords: Tax, internet gambling, casino, poker, federal law, state law, banks, Ryan Landes, foreign site, underage gambling, fraud

Suggested Citation

Vandall, Frank J., Why We are Outraged: An Economic Analysis of Internet Gambling (January 14, 2009). University of Richmond Law Review, Vol. 7, 2008; Emory Law and Economics Research Paper No. 9-40; Emory Public Law Research Paper No. 9-52. Available at SSRN: https://ssrn.com/abstract=1327806 or http://dx.doi.org/10.2139/ssrn.1327806

Frank J. Vandall (Contact Author)

Emory University School of Law ( email )

1301 Clifton Road
Atlanta, GA 30322
United States
404-727-6510 (Phone)
404-727-6820 (Fax)

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