US Online Casinos Bring Less Profit Than Expected According to Industry Specialists


Posted: May 25, 2014

Updated: October 4, 2017

Internet gambling in the US is not as successful as expected according to professionals dealing with this hot industry, reported by Associated Press.

It seems that one year after Ultimate Poker, the first legal online poker site in the US began its operation, the situation is not as flourishing as predicted. The main reasons for that are some legal constrains, technical difficulties and the incredible success of offshore operators, which are still more attractive for the end user.

David Rebuck, director of the New Jersey Division of Gaming Enforcement, said at the East Coast Gaming Congress in Atlantic City: “Internet gambling exists in all 50 states today. It’s just not regulated.”

Future prospects

US online casinos brought less profit than expected

• Currently, three US states allow online gambling – New Jersey, Nevada and Delaware

• Nevada made a revenue of $9.4 million for 11 months

• New Jersey made $200 million

Currently, internet gambling is legal in three states: New Jersey, Nevada and Delaware, which have individual approach towards out of state companies offering services to their residents.

With the rather disappointing start in mind, still the participants in the NJ congress expressed their opinion that the business of online casinos in the US will continue to grow and will reach other states as well.

Eamonn Toland, president of the North American division of Paddy Power, said: “We think what’s happening in the US is the single most exciting happening in I-gaming in the world.”

According to Morgan Stanley, leading financial services corporation, in 6 years time, the legal internet gaming industry in the country will generate $8 billion/year. Currently, around 10 more states are willing to join the club of the initial three, who are already offering legal online gambling services.

Revenues and expectatations

When it comes to revenues, Nevada regulators didn’t risk to publicly announce their expectations for the first year of online gambling in the state. The revenues, which were made for this period, were $9.4 million for 11 months.

In New Jersey, a prediction was given by governor Chris Christie, who said the revenue for the first year in the state will be around $1 billion, but according to some analysts, the actual number is much less, at $200 million.

The major problems which online operators are having for this initial period include mainly technical software issues, gaining the trust of the clients, as well as potential breaking of the industry legislation.

After the Black Friday in 2011, when several operators were shut down for breaking the law, the Republican Party was quick to initiate bills for banning online gambling.

Naturally, these bills are supported by casino magnate Sheldon Adelson, CEO of Las Vegas Sands, who didn’t want to lose customers to the attractive online gambling opportunities.

Various opinions

It is interesting that other major land-based casino operators like MGM Resorts and Caesars Entertainment are looking forward into the online aspect of their business and pushing for legislation, which is the exact opposite of Adelson’s approach, who stays firmly behind the “Coalition to Stop Internet Gambling.”

Adelson said: “I see what exploitation of poor and vulnerable people does to a family,” referring to his own childhood when he suffered his dad’s problem gambling habit. “I don’t want a casino to be put on every kitchen table or iPad.”

It seems that currently a huge percentage of US citizens are supporting his opinion, as Fairleigh Dickinson University, announced the results of a PublicMind poll, which shows that 63% of the participants oppose the legalization of online gambling in more states.

Of course there are also enough people who support online gaming in the US, gathered together in a group “Coalition for Consumer and Online Protection.” Their main line is that regulation of the online market will protect players from shady operators, who just want to take advantage of consumers.

Mary Bono, former Republican congresswoman from California and group’s co-chair, said: “Banning online gaming will only make it less safe and drive it deeper into the shadows.”

Karl Bennison, Gaming Control Board Enforcement Chief, added: “There was a steep learning curve in the beginning.”

Despite the smaller revenues than expected, online gambling in the US is getting more and more popular and the fact that more states are competing for licensing is only one of the signs that there is a lot more to expect from this business.

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