The reigning American casino havens, Las Vegas and Atlantic City, are feeling the pinch in this frosty economic climate. So why does the rest of the normal world want to legalize gambling?

Generally, American states are allowed to set their own gambling policies and the boost to state coffers gambling provides is not lost on legislators. Delaware and Pennsylvania are waging a small war over the market for slot machines; Delaware had them first but saw their popularity wane when Pennsylvania opened parlors in 2006. Montana is one of the rare states that allows betting on sports. Oregon did as well until they ended their $25 million sports lottery program in 2007 amid threats from the NBA and NCAA.

Getting wind of the $1.1 billion Pennsylvania’s seven casinos generated between January 1 and March 15 of this year, Ohio is weighing a casino ballot proposal. But the big news is the federal lawsuit filed against the Justice Department to overturn the national ban on sports betting. Filed in Newark, the suit lists U.S. Attorney General Eric Holder among the defendants and maintains that the 1992 Professional and Amateur Sports Protection Act is unconstitutional because it allows special privileges to the four states--Nevada, Delaware, Montana, and Oregon--that allow sports betting.

Plaintiff and New Jersey State Senator Ray Lesniak claims the law deprives his state of $100 million in annual tax revenue. Not surprisingly, a number of high-ranking legislators, including Governors Jon Corzine of New Jersey and Ed Rendell of Pennsylvania, are exploring taxes on everything from sports betting to video poker. And regulating industries as contentious as gambling often require much more than luck.