Another twist on things


Dormant account
May 11, 2006
North of Antarctica
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Internet gambling companies face a wave of consolidation in the wake of the US clampdown on online gaming, which could see American casinos and gambling businesses swooping for bargains in the sector...
So let's see:

1. The big Vegas names push for the U.S. ban on online gaming

2. Shares of foreign brands plummet and smaller brands go out of business

3. The big Vegas names take over the once successful, but now failing brands and exploit the experience, success, and brand recognition that they rightfully earned

4. The new Vegas owners of these brands continue to serve non-U.S. customers, while learning the ropes and gaining valuable experience that they have not yet been able to learn

5. After running the businesses for a while, they can give the "wink-wink" signal to the politicians that it's time to legalize and regulate the business in the U.S.

6. Then they will dominate the land-based U.S. market, the online U.S. market, and the online foreign market.

So, in effect, this move could be the beginning of a much larger conspiracy to strong-arm a hostile takeover of the industry. That would be downright scummy if that's what the true intent behind all this is. But, hey, that's the American way.

(NOTE: I do not necessarily believe this is what's happening, but it sure does seem to be a plausible explanation)
Many happenings in the business world do not happen by chance but by long-range planning, conniving, back-door deals. It is plausible your scenario could play out.
It's a Machiavellian plan alright, but in fairness to the AGA I should point out that one of the early reactions to the vote came from the AGA's top man, Frank Fahrenkopf who said the vote was disappointing in that the AGA had already supported (and they had) a call by Rep. Jon Porter for a bi-partisan congressional committee of enquiry into online gambling rather than an immediate ban. This notable change in position for the AGA occurred some months back.

Later, Fahrenkopf was reported thus:

"Frank Fahrenkopf, president of the American Gaming Association (AGA), which represents bricks and mortar gambling businesses in the US, said he did not believe the legislation would be enough to enforce a ban on online gaming. "Money always has a habit of finding its way to where it wants to go," he said.

That said, the ban has possibly had some influence in other areas. There was speculation yesterday that the offer of $15 billion made for Harrah's Monday had been sweetened by the prospect of less competition for the land based gambling industry once online companies were excluded.

I think that speculation was too close to the actual (banning) event to be true, but seeing as we're talking conspiracy theories here....
Just an addendum to say that I certainly believe the damage that has been done, especially to the publicly listed companies via their share prices, does make them more vulnerable to takeovers by risk-ready groups with more confidence in the future than we're seeing at present from investors.

I still believe we're seeing the initial emotion-driven reaction here and that things will eventually settle down, although growth and revenues are definitely going to suffer. This is a terrible blow to the industry, but it is not going to wipe it out, and there are many developments yet to come.
Let's just say, as I've said previously- I believe this is a way to make USA online gaming happen.

It's just really a stupid way.

I am still in the wait and see mode - to the best of my knowledge - it hasn't been signed yet.

And - let me say this... I think the US is stupid if it doesn't open the door right now to the millions and billions of tax dollars it could be making.

Wait and see... wait and see...

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