Legalizing Online Gambling Is a Good Bet

Taxing winnings just might help solve some of the state's revenue problems. Let the games begin!

It’s no secret that local and state governments are starved for revenue. Fortunately, most have avoided broad-based tax increases that kill economic growth and the jobs that come with it. But governments have been less wise and less creative when it comes to producing new revenue streams.

With any luck, that’s about to change. States have begun to implement or at least discuss the legalization of on-line poker with an eye on taxing winnings, just as they are taxed in brick-and-mortar casinos. Other states are seeking to eliminate bans on all kinds of gambling, knowing full well that it is taking place anyway, so why not divert some of the cash into the treasuries of states and municipalities?

Governor Andrew Cuomo reportedly is looking into an expansion of gaming in New York, while some states are studying Washington, D.C.’s recent legalization of on-line poker, a move that has produced an extra $9 million in yearly revenues for the city. That’s all good, because right now countless millions are being spent at the federal level in a vain attempt to crack down on on-line gambling.

It’s a lost cause, and it’s time that governments at all levels recognize—and profit from—reality. People are going to gamble. Either governments can waste resources trying to suppress this activity, or they can legalize it and get a piece of the action.

“If there is going to be gaming, how should it be done?” Mr. Cuomo asked recently. “And that issue, that question, is an important question for the state.”

It is important because the state needs creative solutions to its revenue issues. The state constitutional ban on casinos is out of date. Let’s get rid of it.