Online Poker May Not Provide Enough Revenue for Many States

January 31, 2012
Online Poker May Not Provide Enough Revenue for Many States

Many states are suffering after implementing deep austerity measures as a solution to their ever growing deficits. More of them are considering regulating the online poker industry as a means of generating revenue to offset the financial burdens brought by these budget cuts. However, the potential revenue from online poker may not be as promising as many politicians hope.

Many industry experts have argued that legalizing online poker would bring substantial amounts of revenue into states suffering from growing budget deficits. These experts have conducted extensive revenue forecasts for state governments.

State governments have been conducting their own research as well. Their own experts have found that the actual revenue potential offered by regulating online poker may not be nearly as optimistic as industry experts have suggested. For example, the state of Iowa conducted a study that found that the revenue brought in from legalizing online poker would be about $3 million to $13 million a year. Industry experts projected that regulation would bring about $30 to $35 million in tax revenues.

Although online poker could bring in revenue to states, they are not likely to create the windfall many states need to get their budget problems under control. California is facing a deficit of over $9 billion. Legalizing online poker would only provide up to $250 million in revenues.

Although legalizing online poker may not be a solution all of the financial problems these states face, advocates continue to support it. They insist that it would help states resolve some of their problems, even if it had to be combined with other solutions such as austerity or additional taxes.

However, critics of online poker continue to raise the same concerns they raised before. They argue that legalizing online poker may threaten the wellbeing of consumers and may affect revenues from other forms of gambling.

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