Not long after leading a charge to shut down the largest online poker site in the world, Poker Stars, lawmakers in Maryland passed a bill that exempts fantasy sports from gambling prohibitions just as the 2012 major league baseball season gets underway.  Now players in Maryland can legally collect the prize money that comes along with winning a fantasy sports league.

The bill’s sponsor, Del. John Olszewski Jr., D-Baltimore County, was unsuccessful in two previous attempts to pass this legislation.  To ensure better results on his third attempt, Olszewski relied on help from the fantasy sports industry.  The critical challenge was to educate members of the legislature on how prevalent fantasy sports are in today’s society.

For anyone unfamiliar with fantasy sports, the game allows players to act as team owners by utilizing a draft to select actual athletes from a given sport in order to build a team.  After determining their team’s roster via the draft, players compete with one another in a fantasy league.  The competition is based on statistics generated each week by the actual athletes, and the objective is to end the season with the best collection of statistics of all the teams in the league.

Selecting players during the draft that will generate strong statistics over the course of a season is considered to be a skill.  It is on this basis that Maryland’s Department of Legislative Services ultimately determined that fantasy sports should not be deemed as gambling.

While it makes sense that the Department of Legislative Services came to this conclusion, it is difficult to understand how games like poker can be classified as gambling when the level of skill required to be dominant is considered by many to be higher than that required in fantasy sports.

One might argue that because participating in fantasy sports leagues is so widely thought of as harmless fun, it is easier for lawmakers to exempt fantasy sports from gambling prohibitions. What do you think?

If there is any signal that legalizing online gambling in the United States on a federal level is going to be an uphill battle, it would most certainly be the recent turn of events in District of Columbia. At one time appearing to be a shoe-in for regulation, D.C. has lost its bid to become the first in America to offer legalized online poker and casino bets.

Granted, the process of getting legislation passed in D.C. wasn’t necessarily a due process. In fact, two of the three council members who voted to repeal the legislation that would have effectively given the D.C. Lottery a $38 million contract with Greek lottery vendor, Intralot, said it wasn’t so much an objection to online gambling in principle, but rather, an objection to the approval process and lack of transparency thereof.

Indeed, the contract that was made with Intralot was amended at a later date, effectively giving Intralot a greenlight to develop an online casino and poker software platform for D.C. residents. Following a Washington Times report, highlighting several irregularities of how the bill was changed, D.C. Inspector General, Charles Willoughby, was urged to took a closer look at the contract. And while all parties were cleared of illegal wrongdoing, Mr. Willoughby did concede the contractual process was irregular.

Committee on Finance and Revenue Chairman, David Catania, said that considering the “poisoned climate” of the D.C. governmental office and recent guilty plea of former Council seat member, Harry Thomas Jr., it would be a huge mistake to open the floodgates to an industry prone to money laundering and organized criminal activities if placed in the wrong hands given inadequate oversight.

While the original bill’s sponsor, Michael Brown, said he would make a bid to gather six votes needed to repeal the repeal, so to speak, it is very unlikely he will succeed. What’s most likely is that the repeal will be approved by the full council and that neither Washington D.C. nor the federal government for that matter will be passing any definitive legislation to regulate online gambling any time soon.

The government of Ireland is working on legislation to tax online gambling bets placed in the Emerald Isle. It is an attempt to recoup revenue that is currently going overseas. Michael Noonan, the Minister for Finance, says that work is ongoing on the legislation, but is hopeful that something will be completed this year.

The hardest part is figuring out how to capture that revenue. When Irish citizens wager at online casinos, sports books and poker rooms that are located overseas, the transactions are processed overseas under the jurisdiction of a foreign government, out of the authority of Ireland. Taxing those transactions would be difficult for Ireland.

One way Noonan plans to bring in revenue from transactions with foreign companies is through licensing. The legislation being crafted would require any online gambling website to obtain a license from Ireland if they are going to accept bets from Irish customers. In addition, the companies would have to pay a duty on any bets placed by Irish citizens. The amount of duty is not yet known. A lowering of local betting duties from 2% to 1% is partially blamed for gambling revenue in Ireland dropping from €54 million in 2007 to €30 million in 2010.

Every country faces the same problem as Ireland. Due to the borderless nature of the Internet, people can gamble online at a website located anywhere in the world. If the website is located in the country, that government can tax the transaction, but that is difficult to do if the company is located overseas. Noonan is hopeful that the legislation will make major strides toward correcting that problem.

Soon Iowa residents will be able to bet on horse racing online for the first time. On Thursday, the Iowa Racing and Gaming Commission is expected to approve new online gambling regulations that were passed by the legislature in the last session. Those regulations allow “advance deposit wagering,” which lets gamblers place a bet on horse races if they are not at the track either through telephone or the Internet. In order to place the bet, the person must have already placed a deposit into a betting account.

Insiders say that there are enough votes in the commission for the regulation to be enacted. If so, advance wagering for horse racing could begin on January 1. The change is intended to make horse race betting more accessible. Jack Ketterer, the administrator of the Iowa Racing and Gaming Commission, said that the new procedure is “for people throughout the state who would like to bet on Prairie Meadows races, but who really have no way of doing so” without making a trip to the track. Many of the details still need to be worked out, such as the framework for the depositing. The commission enlisted the help of a California-based consulting firm to help with the depositing.

Many are skeptical of the plan. Mitch Henry, who heads a group called No Casino Iowa, said that allowing online betting for horse races will see an initial increase in profit, but only because “anytime something can be done online – be it legal or illegal – it will encourage folks who are compulsive gamblers.”

The trade group for Australia’s national internet industry told the government that internet service providers (ISPs) should not be charged with policing online gambling. The Internet Industry Association (IIA) submitted a report to parliament recommending that the regulation and restriction be done at the point of access.

Parliament recently called for a review of the Interactive Gambling Act of 2011 to see how it can be made more effective. The law does not ban Australian citizens from playing casino games online, but it does ban online gambling sites from operating in Australia. The law tasks the ISPs with monitoring the activity to make sure no gambling sites break the law. According to the IIA, that places an unfair burden on the Internet industry and is not even effective.

In the statement, the IIA says that they believe “that the point of consumption, that is, the end user’s device, is the only effective and technically feasible way of controlling access to the Internet.” The IIA also points out that there is no realistic way of protecting minors and other Australians from playing at online gambling websites located overseas. For that reason, instead of prohibition, the IIA recommends federal regulation, where companies can obtain licenses to legally operate in the country.

“Australian online gamblers who participate at offshore sites forego the protection of Australian law and harm minimization requirements when they use offshore gambling providers,” the report said. While some politicians, such as Senator Nick Xenophon, are pushing for a full prohibition of online gambling, others support liberalizing the market and regulating it federally.

We probably write about Donald Trump way too often here on OCS, but he is very talented at inserting himself into the news. Lately he has made it known that he wants to invest in the online gambling industry. As we reported earlier, Trump Entertainment is taking part in a joint venture to create an online gambling site with the Trump name to take advantage of regulation when it happens. That puts him at odds with some, though.

There are many attempts to regulate online gambling in one form of another in the United States, some at the state level and some at the local level, some just on poker, and some on all gaming. Trump supports the bill by Texas Republican Representative Joe Barton, which would regulate all online gambling at the federal level. Trump is lobbying hard for the bill’s passage. Ivanka Trump, executive vice president of Trump Entertainment, says that “it would be a tremendous source of taxable revenue for states or the federal government and an enormous generator of jobs.”

Others aren’t so sure. Maryland Democratic Governor Martin O’Malley sent a letter to the House of Representatives, urging them to vote against Barton’s bill, saying that it would hurt the states. O’Malley says that in Maryland, federalized online gambling could cost the state “the $519 million annually we generate from our state lottery – our state’s fourth largest source of revenue – and jeopardize the jobs and survival of lottery retailers, many of which are small businesses.”

Many other state governors and lawmakers share O’Malley’s concerns. For the states to not be hurt by the federal regulation, the legislation needs to be written in such a way that the states can get a cut of the proceeds. Trump disagrees, saying that federal regulation would be beneficial nationally and at the state level. Trump has a lot of influence in Washington (look at how he has abused eminent domain to build his empire), so it will be interesting to see which side wins the debate.

On Tuesday, the Massachusetts House Ways and Means Committee voted unanimously to close the rest of the gambling bill negotiations to the public. The most contentious issues of bills are often handled by committee and the Massachusetts legislature has made it a common practice to close those talks to the public.

The bill would sanction three resort casinos and one slot parlor in the state, with the license for each subject to competitive bidding. Last year, the legislature passed a similar bill authorizing three casinos and two slot parlors at racetracks, but Governor Deval Patrick killed the bill. He is said to be onboard with the current legislation.

One of the points of contention is a provision in the bill that would bar lawmakers from working in the casino industry for a year after they leave public office. That provision is intended to combat corruption by making it so that lawmakers can’t give a favor to a company they plan to work for as soon as they leave office. Some in the House disagree with it, though. Democrat Joseph Wagner said it is tying “one or both hands behind our backs by limiting ourselves.” He also said that making lawmakers wait one year before working in the casino industry would be to “preclude the best and brightest from being eligible.” He even went so far as to say that lawmakers should be allowed to work for casinos even if they are “in the government presently.”

The House will begin a seven-week recess on November 16. Source in the House of Representatives say they are “hopeful” that the negotiations will be completed before then. Once the bill passes the legislature, it is likely to be signed by Patrick unless there have been major changes to it.

The tea leaves seem to say that federal online gambling regulation is coming soon to the United States. There is the fact that it is a way of cutting into the national debt without raising taxes. There is the fact that the House of Representatives has held a hearing on the impact of regulation. And now we have a lot of rich entrepreneurs looking to get into the action.

As reported earlier on OnlineCasinoSuite.com, Donald Trump’s Trump Entertainment is entering a joint venture with Avenue Capital Group to offer online gambling once regulation legislation is passed. Trump isn’t the only big name to get prepared for eventual regulation, though. On Monday, two Las Vegas-based casino companies announced that they are forming a company with one of the largest online gambling companies in the industry.

Boyd Gaming and MGM Resorts International, both major players in the Las Vegas casino scene, announced that they will create a new entity by joining bwin.Party. In the new company, which is not yet named, bwin.Party will own 65% of the company, with MGM having 25% and Boyd the other 10%. Jim Murren, CEO of MGM Resorts, said that the decision is an “anticipatory” move that will take advantage of the new American online gambling market when it is created.

Another big land casino/online gambling joint venture involves Mirage Resorts. CEO Richard Bronson got the ball rolling two years ago because he thought regulation was inevitable. Not all of these types of ventures work out. Steve Wynn’s deal with PokerStars certainly backfired. Still, it’s a good sign that the big players in the American industry are starting to invest capital in the potential market.

As the U.S. federal government desperately searches for ways to trim the national deficit, reduce spending, and increase revenue, online gambling has become a hot topic. Last week, the U.S. House of Representatives held a hearing on regulating the industry, presided over by Republican chair Mary Bono Mack, a proponent of regulation.

There are many objections to federal online gambling regulation from many different groups. There are the groups who oppose all gambling on moral grounds. There are the tribal groups who are worried about losing business at their tribal brick and mortar casinos. And now we are starting to hear more opposition from leaders in state governments.

Maryland Governor Martin O’Malley wrote a letter to Congress, saying that in Maryland “federalized poker and casino gambling would put at risk the $19 million annually we generate from our state Lottery – our state’s fourth largest source of revenue – and jeopardize the jobs and survival of lottery retailers, many of which are small businesses.”

It is a very real concern. Just as online versions of other businesses have become tough competition for their brick and mortar counterparts (think of the Amazon.com effect), the same could happen with gambling. If people can play their favorite games online from home, would fewer people make a trip to state casinos? Probably.

That is why it is important for the states to get onboard with the regulation. If online gambling regulation happens at the federal level, states need to be involved to get a piece of the pie. Many states, such as New Jersey and California, are attempting to pass their own laws regulating online gambling. If no federal regulation is passed, the states could only allow gambling to take place within state borders. That limits the size of the casino’s customers, but at least there is no federal encroachment. If the federal government regulates the industry, though, the state-licensed online casinos could accept customers across the entire country (and possibly internationally). The feds would get some of the tax revenue, but the state would as well.

The great challenge facing lawmakers is not whether or not to regulate the online casino industry. Most people believe that will happen eventually, and probably soon. The challenge will be finding out a way to benefit everyone, so the states and tribal casinos don’t suffer.