Okay so I'm almost done with my paper and I'm come across some really good info for you guys. I can't exactly share it with everyone here at Covers because of plagarism concerns. But I can definitely say this with confidence: No way the US Government can continue to pursue prohibition in an environment where it is impossible to enforce. It will ultimately become legalized based on history.
There have been waves of gambling in America - in fact colleges like Harvard, W&M, Yale and Columbia (among others) would have never been started if it weren't for gambling. Also towns like Tunica, Davenport (Quad Cities), Las Vegas have economies that thrive on gambling economies which prop those towns up and put plenty of tax dollars in the local governments there to help pay for things like roads, schools, and medical/fire/police facilities. The fact is places like this are going to have to go along with technology.
The hard fact is somewhere between $10-$100's of billions of dollars a year are wagered by US citizens in foreign books. We are just a small part of the population (sports bettors). Over 90% of an online casino handle is from games like slots and tables (just like the real casinos). This is money that SHOULD be going into the US economy, not Costa Rica or Antigua.
Also, people need to understand that internet gambling is giving way for pathological gambling and compulsive gambling disorder to reach new levels. Nobody ever has a problem when they are doing well, but when they are losing it when it seems to become a problem. Truth is there are many people out there who have no gambling education (education that should be taught in schools like drugs and sex), and continuously throw money down the drain putting them far in debt. Studies done of Canadian internet gamblers also show since it is a solitary activities (unlike other forms of gambling) makes it WAY more dangerous. Coincidentally, in that same Canadian study done out of Quebec last month, shows online gamblers are 3x more likely to be pot smokers than people who gamble at the casino live.
Interesting correlation - still trying to make sense of that one.
The main thing is that the longer is stays illegal, the more money the US is potentially missing out on. While many recent pieces of federal legislation has failed to legalize gambling over the internet, local governments are starting to take steps in their own hands (much like you are seeing with the pro-pot movement). Just a matter of time - not if.
Regulation and fairness of the environment will drive up competition leading for a more enjoyable and less dangerous gambling experience. Wager limits, time someone can spend gambling, and client screening (much like the system ebay incoporates) will ultimately improve gambling over the internet where there won't be much concern in it.
After all - I think all US players would probably agree with this: They would feel much more confident putting their money in a US book (where they also know if they lose the money isn't going overseas) and could probably have a much more well devised system for withdrawls/deposits. Not to mention a US book would be under US laws which would keep books from engaging in any kind of shady business this side of the border.