Forbes investment writer examines the future for US online gambling
Respected investment journalist Christopher Versace took to Forbes magazine this week to examine the possibilities for online gambling in the United States, concluding:
"For those companies that don't embrace online gaming or sit on the sidelines too long – Wynn Resorts, Las Vegas Sands, and others – they risk becoming a mobile phone in a smartphone and tablet world."
On a global basis, online gambling has grown into a multi-billion dollar business, particularly in Europe, Versace notes.
Whilst historically the pastime has appealed mainly to younger men, that demographic group has expanded to include both women and older age groups, he reports.
Since 2004, women's share of Internet users between the ages of 16 and 74 in Europe has increased by more than 80 percent, while the same age group for men has seen an increase of 60 percent.
Versace records the development of the industry in his article, covering the increasing interest in legalisation from a growing number of US states.
He goes on to quote GamblingData predictions that New Jersey's online gambling market will generate $262 million in gross gambling revenue this year and $463 million by 2017, and third party forecasts that the US is poised to earn gross winnings of over $7.4 billion by 2017, representing around 30 percent of the global online gaming market.
Examining the negative side of the issue, Versace recounts the banning efforts of Sheldon Adelson and his Coalition to Stop Internet Gambling, commenting:
"Former New York Governor George Pataki who now serves as the co-chair of the Coalition to Stop Internet Gambling, is attempting to paint a scary picture when it comes to Internet gaming instead of focusing on the potential benefits of jobs and tax revenue to be had while technology addresses consumer and business concerns.
"Keep in mind this is far different than the view the former governor expressed in late 1996 when he supported legalizing casino gambling in the state of New York. As Pataki said at the time 'We have to be in a position where the state has the ability to have more control and possibility of getting revenue — property taxes, sales taxes, income taxes — from this industry.'
"Given the fiscal status of many states and municipalities, one has to wonder why Pataki would want to keep the gaming industry confined to whips and buggies rather than implement business forward regulations to minimize the risks while maximizing jobs and taxable revenue."
The Forbes writes goes on to debunk and dismiss much of the CSIG rhetoric against e-gaming as unsubstantiated, and warns that failure to embrace online gambling could result in US companies losing out to offshore enterprises
Versace suggests that the danger most feared by the CSIG appears to be that of competition for its land-based interests, and that from an investor perspective, government intervention is never helpful.
If the market is allowed to continue and expand, the growth of online gaming should be a revenue boost to companies like Caesars Entertainment, Boyd Gaming, MGM Resorts and others that have partnered with 888 Holdings and Bwin.Party to enter the online gaming environment, Versace predicts.
The impact of technology can result in significant shareholder value and it's poised to do so again with online gaming, he opines.
"For those companies that don't embrace online gaming or sit on the sidelines too long — Wynn Resorts, Las Vegas Sands, and others — they risk becoming a mobile phone in a smartphone and tablet world," he concludes.
Read the full article here: http://www.forbes.com/sites/chrisversace/2014/02/26/the-time-is-here-for-online-gaming/
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