US Online Gambling A Danger To Land-Based Casino Profits?December 7, 2013 12:55 pm
The US finally embraced online gambling this year, with Delaware, Nevada and then New Jersey becoming the first states to gain a foothold in the fledgling regulated internet gambling market. The decision is naturally seen as a shrewd move to be part of a global industry worth $33 billion, with initial estimate predicting legal US online gambling revenues could rake in $670 million next year and up to $9.3 billion by 2020.
New Jersey, the latest state to join, is also the biggest market of the three and according to analysts the state could generate up to $300 million in revenues in 2014, rising to more than $750 million in subsequent years. In addition to a lucrative stream of income, legalized online gambling is also seen as a way to give New Jersey’s ailing bricks-and-mortar casino industry a much-needed shot in the arm, and as state senator Raymond Lesniak explained recently;
“Without online gaming, two casinos would have closed and 5,000 to 10,000 people would have been out of jobs in Atlantic City.”
Nevertheless, despite being hailed as a positive move for the gambling industry as a whole, others companies see potential risks to their business, including the biggest casino operator in the world, Caesars Entertainment, which operates more than 50 casinos and hotels including four out of Atlantic City’s twelve casinos.
It would appear that the biggest concern the company has is that the revenues it will now derive from offering online gambling will be insufficient to offset visitor declines to its land-based casinos, and as a company statement commented:
“Caesars will, and other online providers do, offer online gaming options that compete with our live poker offerings in Nevada and New Jersey. Expansion of online gaming in Nevada, the commencement and expansion of online gaming in New Jersey and the introduction of online gaming in other jurisdictions may further compete with our operations. Online gaming may reduce customer visitation and spend in our traditional casinos in Nevada and New Jersey, which could have an adverse impact on our business and result of operations.”
In other words, Atlantic City casinos should see an improvement in their bottom line profits from online gaming, but their live casino operations may see slimmer margins as more gamblers chose to play from the comfort of their own homes. However, whereas others are taking a more wait and see approach before reserving judgement, Las Vegas Sands Corporation CEO Sheldon Adelson has been online gambling’s most vociferous opponent and has been doing his utmost to discredit it at every turn.
Despite the possibility of online gambling eating into land-based casino profits, the casino magnate, Sheldon Adelson, has chosen to attack internet gambling, instead, as a danger to society, a stance deemed my many as an ingenuous move to protect his own interests :
“‘Click your mouse and lose your house’ isn’t a marketing slogan for advocates of legalized online gambling. But it should be. As an industry leader, and more importantly as a father, grandfather, citizen and patriot of this great country, I am adamantly opposed to the legalization and proliferation of online casino gaming,” explained Adelson.