It is all about revenue - lost revenue.
The history behind the ban is that stand alone casinos (ala, vegas) were losing money to offshore online sites. So the geniuses in this country decided to ban online gambling. If it was such a moral sin to begin with, why stop with just banning gambling online?
The irony here was it was really only going to benefit place like vegas, reno, atlantic city. And to add further irony to the law, the law did not touch horse racing and dog racing betting online, only the casino type action.
Well, it did not work. Offshore sites and betting skyrocketed.
Now, with all the states coffers suffering, everyone decided they want a cut of the action.