http://www.physorg.com/news110046945.html

Once they can settle on who gets the tax revenue from online gambling you can bet (pun intended) it"ll be legalized. No government likes that much revenue going out of the country. But as it stands, there is no clear cut way to determine if the taxes should go to the state of the winner, the federal gov"t or the country sponsoring the gambling.

There are many reasons for this law beyond tax, while I will agree that politically tax is probably the biggest one. Here are a few examples..

Lets say Joe in country X gambles in an American on line casino and goes bankrupt.. by what authority can the American casino collect its money from Joe? There is no doubt that Joe will collect his winnings from the American casino but little chance that the casino could collect from Joe.

Now lets put Joe in America and the casino over seas in country X. Again Joe looses to the casino gets into debt. Now do you want to see Joe sent to country X where he could potentially be hanged, shot, terrorized, or stuck in their prisons for god knows how long?

Another question would be who would check the gambling mechanisms to make sure they are not rigged? Does America have the right or even the ability to ensure that the programs used in country X are fair.

Then you also have to consider that the owners and countries running the off shore gambling may be someone with whom the US forbids trading with. What if they are in Cuba? or owned by say a front company/sympathetic support for UBL? There would be little chance for the American govt to stop you from using these sites.

As it sits now there is little chance for the American govt to do much to stop people from gambling at these places other than the threat of jail time and penalties. Again as I said before tho.. I agree with you that if the solution of taxes ever gets answered it will be come "politically" legal topic (ergo all our politicians will get behind it and make it happen.)