These days we mostly think of Asia or South America as the place where work will be outsourced but in the gaming industry, it is the British we should fear, reports BusinessWeek. The government there has decided to dispense with any moralizing and to regulate and tax the online gambling business that is flourishing in Europe and the U.S even though the company’s were once shadowy presences in off-shore havens.

The magazine points out that the British have a long tradition of legal bookmaking shops in every town and they see themselves as an attractive base for start-ups that will want the good housekeeping seal of approval from the recently formed Gambling Commission. It sounds a bit like our Gaming Control Board.

BusinessWeek says the U.S. is going in the opposite direction with Internet gambling. Congress is working on bills to outlaw Internet gambling rather than just rely on old telephone laws, and is planning to outlaw any banking and credit facilities that keep the money flowing to the offshore operators.

Partygaming, one of the big British players is sufficiently unnerved that it is looking to diversify away from U.S. bettors. Up to 90 percent of its customers are now Americans.

The story blames an unholy alliance of conservatives and casinos for the ban in the U.S. but doens’t say which casinos. MGM Mirage flirted with online gaming but pulled back when regulators got upset. This promises, though, to be a replay of the debate in the early 1990s when Nevada companies were threatened for co-operating with out-of-state casinos. Instead of fearing it, the Internet seems tailor-made to generate more business for the state just as the Internet has fueled poker and brought players to Las Vegas to see the big time.