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Regulated Online Gambling Could Yield Billions of Dollars, Tens of Thousands of Jobs

April 21, 2010 (CAP Newswire) – A pair of high-profile reports were revealed in recent days that urge governments to legalize and regulate online gambling in order to stimulate the economy.

In the U.S., political website The Hill reports that “legalizing online gambling could create tens of thousands of new jobs over five years,” writes Kevin Bogardus, citing a new research report from H2 Gambling Capital, U.K.- based market analysis firm. In addition to the 32,000 new jobs the report cites, legalized online gambling would also yield “$57.5 billion in new tax revenue over five years. It could also lead to $94 billion in new economic activity, the firm estimates.”

“This study should provide further incentive for the Obama administration and Congress to act quickly to regulate Internet gambling,” Simon Holliday, a director at H2, said in a statement published in The Hill article.

The report also argues that the UIGEA and other anti-online gambling laws are throwing away billions of dollars “and leaving tens of thousands of U.S. players without any onshore regulatory protection” — the kind of protection that may prevent certain money launderers from manipulating an online gambling industry that’s short on legal payment solutions.

As usual, eGaming Review digs a little deeper to see how legalized online sports betting would fit in. (Internet betting would not be legalized under the terms of Barney Frank’s HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act.) “However even with sports betting exempted from the model, H2 suggests a gross expenditure of US$67bn over five years would generate US$30.8bn in tax revenue and 25,470 new jobs,” Stephen Carter writes at  

In Australia, a similar study states that the online gambling is experiencing an incredible popularity surge, and what is now a $790 million industry will likely double by 2012. ($790 may seem like a somewhat paltry number compared to the billions cited above for the American market, but it seems less so when one considers that Australia’s population is about 1/12th of the U.S.) 

“Australia stands to rake in the dollars if it relaxes online gambling restrictions,” the Sydney Morning Herald states. “There’s a wealth of revenue to be made if Australia can shape and expand the market, which is set to explode given technological advances in mobile phones and other devices.”

“It is an underground economy that could become authorised with a sustained period of re-regulation and expand significantly,” a spokesperson for KPMG, the author of the new report, said in a statement.

Internationally, the report predicts that the Internet gambling market will grow by 42% by the year 2012. “Prospects for growth … are enormous since some of the biggest potential markets (Australia, US, China, Japan and South Korea, in particular) prohibit many forms of gambling over the internet,” reports.

“While it is difficult to predict political and legislative action,” the report adds, “many markets that now ban online gaming could easily change their laws as a means of authorizing what is now an underground economy and increasing tax revenues.”

As Anthony Travers, of KPMG Australia’s Gaming Industry Practice, said: “Governments in many parts of the world are quietly rethinking their opposition to online gambling. With the potential for growth in the sector increasing, the market we see now could be just the tip of the iceberg.”

With the legalization and regulation of online gambling getting more and more mainstream media coverage as the world economy continues to struggle, there’s a good shot that these reports will be taken fairly seriously by politicians. (The fact that they’re getting coverage in non-gambling industry publications says a lot on its own.) And if that happens, online casino affiliates will likely see a nice percentage of all that new revenue.