Despite getting initial signs of support from the necessary authorities, online gaming is now once again facing a problem that hinders its progress in the US.
The 2014 Global Gaming Expo (G2E) that was held last week in Las Vegas brought together some of the biggest names in the industry to showcase and outline their plans for the future. Since the last time all of the heavyweights gathered many things have changed which will result in impacting the way customers play their games.
Although many gaming segments have experienced some alterations, the main differences were felt in the online poker industry. Several big companies were involved in large acquisition deals that saw them take over the reigns as online poker providers, while a number of US states have finally decided to offer internet gaming services to their residents.
Complications emerge for online gaming in US
• Online gaming loses support from AGA
• New Jersey accounts for almost all online gaming revenue in US
• Online gaming is predominantly mobile
After a long and protracted battle with the legislators, Delaware and New Jersey finally launched their online gaming operations in November 2013. By meeting some of the relevant regulations set by US gambling laws, the two respective states were able to join Nevada (that offers poker-only) as the initial three states that had the right to offer online gaming services.
In December of 2013, the popular Wynn Resorts joined forces with Station Casinos and Churchill Downs to become part of the American Gaming Association (AGA). The move was strongly talked about as the owner of Wynn, Steve Wynn, made his return to the Association for the first time since selling the modern day MGM Resorts International in 1999.
The online gaming community feared what might come of this arrangement, as Wynn was vocal in his support of Sheldon Adelson’s (owner of Las Vegas Sands) views of banning internet gaming in the US. This led to the AGA releasing a statement in which they were retracting their support for online gaming as their members were divisive on the issue.
For a while it seemed that online gaming was gaining traction in the US and could perhaps face less hostility from regulators as it attempted to be expanded by big firms. However despite offering some of the best casinos for US players, internet gaming is now once again facing a roadblock that will take some time to resolve.
New Jersey takes in the greatest online gaming revenues
At the beginning of last June Amaya Gaming Group, a Canadian gaming supplier that provider equipment and online systems, decided to acquire both the Oldford Group and the Rational Group. The latter is the parent company of the famous PokerStars and Full Tilt, which Amaya bought so that they could enter the New Jersey market and expand from there.
Up until now the three states (New Jersey, Delaware and Nevada) have not managed to successfully employ their mobile betting operations. The results for 2014 (through August) indicate that a total of $92 million has been generated from online gaming from the three states combined, a figure that is far lower than previously expected.
Of the $92 million amount New Jersey is responsible for grossing a total of $83.7 million (almost 91%). Online poker in the state has only managed to generate roughly a quarter of that figure with sales showing $21.1 million coming from card plays. The rest goes to mobile casinos and other similar internet gaming pursuits.
With these performance figures in mind, industry experts believe that online gaming and more specifically online poker will be held in the hands of two or three big providers for each state. For now, Caesars Entertainment and MGM/Boyd Gaming/bwin.party Borgata partnership maintain a stronghold in the New Jersey market as almost all revenues go to them.
A combined total of 82% or internet gaming revenues in the state is attributed to Caesars, Borgata and the Tropicana, which represents a vast difference in how much other operators are generating from the industry. Bwin.party on the other hand has highlighted that for the first six months of operations they have lost $9.2 million with additional losses predicted.
Considering the ambivalence in the online gaming market in the US, it is no wonder that the results have been underperforming. Many corners of the industry have voiced the need to invest more in the business as current standards show that most people prefer to play games on their mobile phones, a fact that is important to consider for the future of internet gaming.