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Online Casino Closes Due to Poor Performance

Discussion in 'Online Casinos' started by jmildstone, Mar 6, 2005.

    Mar 6, 2005
  1. jmildstone

    jmildstone Dormant account

    Location:
    Vermont
    Online Casino Closes Due to Poor Performance
    6 March 2005


    A well known online casino has been shut down and will remain non-operational due to poor performance and huge financial losses. There have been other online casinos that have closed in the past but the trend is relatively rare in the profitable online casino business. The industry rarely sees entire operations close down but just as some online gamblers dont always come up winners, the online casinos also take a loss. In this case it was Harrah's Entertainment Inc that has been permanently closed due to heavy financial losses and negative profits.

    Harrah's Entertainment online casino, based out of the U.K. has decided to terminate their operations after posting losses of $9.3 million last year. The online casino industry is usually quite profitable and it is rare that online casinos close up but Harrahs was a different type of casino with a different type of gaming structure. At this online casino the players could access as many games as they wanted based on a monthly subscription. There were different packages they could sign up for and essential they could play as much as they wanted within a certain time frame. This structure is rather different for an online casino and has proven to be less profitable for the owners than the standard model which is based on depositing on each game.

    The online casino LuckyMe, was opened in November 2003 to British casino players and was closed for business in October 2004. Ultimately, the online casino was discontinued because it was not making profits and taking heavy financial losses said a spokesman for the company. Also, in 2003, a similar case developed when MGM Mirage (the famous Las Vegas land based casino) shut down its gambling operations and online casino site due to uncertain legal stipulations in Europe. This online casino catered specifically to Europeans and online casino players in the UK.

    When an online casino closes it has to be for a serious reason because traditionally the online gambling business has proven to be very profitable. The online gambling structure of the LuckyMe casino was somewhat unconventional and this is probably why it took such large financial losses. Other online casinos will look at this as a learning experience and will also use it to figure out ways not to go bankrupt.
     
  2. Mar 6, 2005
  3. Macgyver

    Macgyver Dormant account PABnononaccred

    Occupation:
    Student
    Location:
    North Carolina
  4. Mar 7, 2005
  5. mary

    mary Dormant account

    The Harrahs promotional gaming site (not really a casino) had a lot more going against it than being "unconventional".

    For one thing, Harrahs is an US casino company, yet it could neither market to nor accept US players. The site was targeted at UK players. Yet the UK players can go ahead and play real casino games at UK brandname sites and win more money with real betting.

    The Harrahs site just didn't have anything it could offer UK bettors.

    I don't know how they went through so much money, frankly. It had to be spending it on marketing.
     
  6. Mar 7, 2005
  7. eek

    eek Dormant account

    These places like
    You must register/login in order to see the link.
    seem to exist in a grey area where stuff like slots and even roulette are allowed, but an ecasino is not...
    Any connected ecasino would be based in Alderney etc.

    I recall reading somewhere that the slots can be set up with each player as a bingo/keno player, the computer allocates you your numbers and a draw is made and any 'winners' get a payout according to the hits they get.
    The interface however, is a slot machine.

    The poker room seems to be based in Alderney.
    Each client provides players (GoldenPalace, BlueSquare etc) for a serverfarm where poker is played in suffient numbers to achieve commercial viability.
     
    Last edited: Mar 7, 2005
  8. Mar 7, 2005
  9. jetset

    jetset Ueber Meister CAG

    Occupation:
    Senior Partner, InfoPowa News Service
    Location:
    Earth
    Yes, this was in Casinomeister News, but this version of the article has an additional editorial opinion on the original news piece thus:

    QUOTE: There have been other online casinos that have closed in the past but the trend is relatively rare in the profitable online casino business. The industry rarely sees entire operations close down but just as some online gamblers dont always come up winners, the online casinos also take a loss.UNQUOTE

    Judging by the number of "CLOSED" entries I see in my database on online casinos across the industry over the past six years, I don't believe that statement is correct.
     
  10. Mar 7, 2005
  11. mary

    mary Dormant account

    eek, welcome to the wacky world of land gaming in the United States.

    Those "electronic aids for playing bingo" that look an awful lot like a Las Vegas slot machine can be found in Oklahoma, California, and Washington State (among other places)

    See, slot machines are illegal in those states. Washinton defines a slot machine as a gaming device with reels, that takes and spits out coins, has a handle, and generates its game result.

    So...Washington has gaming terminals with video reels, no handles, takes tickets instead of coins, and is for playing bingo. Little video picture of a bingo card in the corner. Big video picture of reels.

    I figure the Harrahs site was a placeholder to see if fixed-fee sweepstakes games would somehow be ruled ok in the US. Didn't happen. US players can win cash for real (at very looooong odds) on AOL and Pogo.com on games of skill and chance, because it costs the player nothing. (Have to look at an ad every thirty minutes).

    Pogo.com has licensed game designs to IGT to be turned into slot machines.
     

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