Fantastic post Prof., couldnt have said it better myself.
I was a firm believer that a select few land based casinos would enter the online gaming market with US approved online gambling licenses.
But now I dont think so. I’m also sure its not a case of taxes! But rather of taking away online gambling, so that land based casinos continue to be only source of gambling.
Its very simple to tax internet transactions. Its a simple reverse tax, you pay the tax on your deposits, not on your winnings.
Gambling companies use gambling merchants / accounts, which have gambling identifiers. When a US citizen makes a bet, and funds are transferred from a US bank account to a gambling merchant, it has to go through a US bank. The US bank takes the tax at that point, and passes it onto the goverment.
Its really quite simple.
1. They want players at their casinos where they can maximize profits.
3. Online gaming would create significantly less tax revenue for states then does land based casinos.