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Online gambling: Will Massachusetts legalize Internet betting sites?

Originally published on Technorati

An attendee uses an iPad during day 3 of Graduate Fashion Week 2014 at The Old Truman Brewery on June 2, 2014 in London, England.
Photo by Tristan Fewings/Getty Images

In 2013, lawmakers in Massachusetts have introduced amendments to a bill that would grant licenses to online poker operators, according to Gaming Intelligence. The bill is sponsored by 18 politicians two years after the U.S. Justice Department shut down PokerStars, Full Tilt, and similar Texas Hold’em sites.

Under the new proposal, any online poker operator would have to receive a Category 3 license. A maximum of three online poker operator licenses would be granted and it would be valid for ten years.

In 2006, congress passed the Unlawful Internet Gambling Enforcement Act of 2006 which outlawed Internet betting sites. However, officials in Massachusetts argue that the federal law is not effective at stopping thousands of its citizens from playing internet poker through illegal offshore-based sites. Thus, they argue it should be legalized, regulated, and ultimately taxed.

Massachusetts is following in the footsteps of Illinois and New Jersey in considering granting gambling licenses to betting websites. The state ranks second in the nation with more than $80 billion in state debt.

However, it remains to be seen whether Massachusetts will legalize Internet gambling. Opponents argue that passage of such legislation would essentially place a casino in every household with an Internet connection.

Recent market signals indicate that Massachusetts is seriously considering expanding its casino base. Last year, Maryland Live – a casino operator – disclosed that it has submitted a Category 2 license to operate a betting parlor in the state. Similarly, Penn National Gaming also announced that it has recently spent $1.9 million in “development costs” to establish similar operations in Massachusetts. It’s not clear whether those expenses went towards lobbying efforts.

Illinois is also considering legalizing online poker due to massive unfunded pension liabilities for its unionized public employees. In addition to record deficits, the state faces $2 billion in unpaid bills to vendors in 2014. Last month, a state lawmaker inserted technical language to Senate Bill 1739 that would allow PokerStars and Full Tilt to operate sanctioned online portals. Officials estimate that legalized online betting would bring in between $400 million and $1 billion in taxable revenue.

Since the measures in Massachusetts and Illinois are still pending, New Jersey could be the first state in America to issue an online gambling license. Earlier this week, the state's Division of Gaming Enforcement announced that PokerStars has completed its application for a gaming license. The state has 90 days to review the application.

The popular online poker site is being represented by lobbyist John Kelly, Jr., president and owner of All-Circo Inc., according to Cards Chat. Kelly is advocating the legalization of online betting sites with state and national politicians. Industry insiders believe the advocacy will play a key fundraising role in what is expected to be a highly contentious 2014 midterm elections.

New Jersey is also desperate for cash after seeing its unfunded pension liabilities increase to $47.2 billion in 2012. Some industry pundits believe that legalization of online betting could lead to the development of mobile and social apps that enable users to gamble on their devices.

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