The Rise of Online Gambling and Its Future in the United States

October 30, 2014 Updated: April 23, 2016

For millennia, gambling has provided a rush that most other experiences can’t duplicate. In recent years, gambling has come to be associated with an experience. When you talk about casinos, you are more apt to associate them with flashing neon lights, the Vegas Strip, a cloud of swirling cigarette smoke, and a cacophony of bells and whistles from thousands of machines.

An even more recent phenomenon, however, takes that experience and digitizes it. The industry of online casino gaming has exploded in the wake of the internet’s rise, and it does show any signs of slowing down. Although its legality in the United States is still questioned, online gambling continues on unabated in places like Europe. Indeed, the largest contingent of online casinos is easily located on the European continent. That’s also where most of the money in the online gaming industry is being made and where more and more entertainment businesses are looking to branch out.

Take, for instance, Hit Gaming, an entertainment company based in Slovenia that owns Europe’s largest brick-and-mortar casino, Perla. In 2013, they reached out to Tom John Light, an expert in online gaming and online sports betting. They wanted Light to spearhead their move into an online casino brand using the name “Hit d.d.” Despite the fact that the company is worth €27 billion, they saw the need to take their business online.

It’s clear they meant business, too. Tom Light isn’t an industry novice. He has worked extensively in the field of online casino gaming from virtually every angle. At his eponymous consulting firm, he was the preferred partner of Playtech, one of the largest developers of casino gaming software on the planet. He also purchased and founded his own online casinos, 1King and 7Red. For Hit d.d., Light is taking charge of their online casino gaming, online poker, and sportsbook operations. Clearly, Hit Gaming wanted the best because they understand what’s at stake.

Of course, they’re not alone. Brick-and-mortar casinos who sell the whole experience fear being outbid by online casinos that are considerably more convenient. Online casinos boast over 173 million gamers worldwide and a revenue stream of $32 billion annually. Some industry experts suggest that, by 2017, mobile gaming alone will be a $100 billion industry. Obviously, the game is changing and Hit Gaming took notice.

But, how much is the game changing in the US? Part of those predictions about 2017 are contingent upon the fact that online casino gaming will be legal in large portions of the United States. As of 2013, online gambling was legal only in Delaware, New Jersey, and Nevada. Following their lead, 9 other states introduced legislation that would legalize online gambling to some degree.

Unlike Hit Gaming and its brick-and-mortar casino properties, many standard casinos in the US are confronting the advent and potential legality of online casino gaming as an affront to their very survival. In fact, the Coalition to Stop Online Gambling, founded by a Vegas billionaire and co-chaired by former New York governor George Pataki, is looking to keep online gambling off of United States soil. Numerous casino properties are joining the fight to keep online gambling out, but is it really worth it? Will online gambling inevitably make it to American shores?

Companies like Boyd Gaming, MGM Resorts, and Caesars Entertainment seem to think so. They have preemptively entered deals to ensure that they get a stake in the online gambling business should it officially make its way to the States. Still others like Las Vegas Sands and Wynn Resorts are counting on the fact that the Coalition to Stop Online Gambling will do what it set out to do.

Of course, this is all coming at a time when casino oversaturation is forcing some established casinos to go out of business. Casino gambling is now legal in 39 states, up from just 2 in 1988. A Harrah’s casino in Tunica, Mississippi recently shut its doors because it went from a $1.2-billion business in 2006 to a $738-million business in 2013. When you add the specter of online gambling to current brick-and-mortar oversaturation, the future may not be as bright for some American casinos.

As of now, online gambling hasn’t made its full-scale invasion of North America. But, it may be time for more multi-billion dollar casino corporations to invest in contingency plans. 

Image Source: https://www.flickr.com/photos/spookman01/5947639534

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