Is it possible? It's probably no more possible today to successfully regulate the virtual industry than it has been to shut it down (or to shut down the traditional illegal casinos in states where they're not legal either). Nevertheless, that's the direction that Congress should be heading, rather than trying to continue a ban that so far has been wholly ineffective.
Gamblers will find a way to gamble, and Internet companies will find ways to profit from them. Nevada-style regulation should be the ultimate goal for lawmakers.