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It may not matter where the casinos are

I don’t know if the gambling industry will finally gain traction in their effort to legally expand operations in Texas, but I do wonder if they’re fighting the last war and missing out on what’s happening now elsewhere in the country.

Silicon Valley is betting that online gambling is its next billion-dollar business, with developers across the industry turning casual games into occasions for adults to wager.

At the moment these games are aimed overseas, where attitudes toward gambling are more relaxed and online betting is generally legal, and extremely lucrative. But game companies, from small teams to Facebook and Zynga, have their eye on the ultimate prize: the rich American market, where most types of real-money online wagers have been cleared by the Justice Department.

Two states, Nevada and Delaware, are already laying the groundwork for virtual gambling. Within months they will most likely be joined by New Jersey.

Bills have also been introduced in Mississippi, Iowa, California and other states, driven by the realization that online gambling could bring in streams of tax revenue. In Iowa alone, online gambling proponents estimated that 150,000 residents were playing poker illegally.

Since that story was published, the states of Nevada and New Jersey have passed their laws to allow online gambling. I’m sure others will follow. Now, online gambling will never truly replace casinos. No matter how good the online experience may become, it won’t include low-cost buffets, cocktail waitresses, or Wayne Newton. Some things you still have to do in person to get the full effect. But online gambling is sure to cut into the profit margins of casinos, and perhaps reduce the overall market for them. If so, that weakens the case for expanded gambling here, at least as far as the current proposals for casinos and slot machines at racetracks go. Of course, the current proposals can be amended to allow a vote on online gambling. I don’t know if the spirit of cooperation that exists now can handle that, but who knows. In any event, this is something to keep an eye on.

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