Morgan Stanley, Merrill Lynch and Goldman Sachs are some of Wall Street’s most prominent financial and investment firms, but they also share another common interest. All three companies are major shareholders in the online gambling industry despite anti-gambling legislation in the U.S. The companies’ shares in firms such as SportingBet and BetOnSports are worth millions of dollars, reflecting their belief that the online gambling industry is here to stay.

Many legal experts question the policy of American companies conducting business with firms whose business activity is not legally recognized in the United States. While legislation in the past has been used to easily interpret a wide variety of cases, the legality issues surrounding online gambling have proved more difficult to address.

The main problem faced by anti-gambling legislators is that revenue from offshore online gambling firms comes mainly from U.S. based gamblers.  The Department of Justice has ruled that online gaming is illegal, yet authorities are powerless to prosecute offshore based firms often located in traditional safe havens such as Gibraltar and the Caribbean.

This position was reiterated in a recent statement from Department of Justice spokesperson Jaclyn Lesch, who said that the organization deemed online gambling to be illegal. However Lesch advised she was unable to comment on “the liability or hypothetical liability of a company or an individual.”

Millions of Americans participate in the online gambling phenomenon each year, with billions of dollars worldwide being generated from sports betting, poker rooms, and casino games. The industry’s popularity is further boosted by a host of advertisements on cable and digital television, radio and in magazines, encouraging new players to experience the thrill and excitement of online gaming.

While many analysts suggest that federal legislation is being ignored, the investment houses’ participation in the industry gives further credence to the opinion that internet commerce is becoming more and more difficult to police. In response, investment houses advise that they are not unaware of the perils associated with the industry. However the opportunity to enjoy huge profits on their investments more than makes up for the element of risk involved.

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