Results tagged “online gaming”

While all the hype about pending US regulation and acceptance of online poker has the industry excited, there is a negative side that nobody is talking about.

At a recent affiliate conference in Amsterdam the talk of pending US regulation was a hot topic of discussion. Every person I talked to was quivering with excitement about how great this was for the industry, and the fantastic opportunities that would arise.

I disagree completely.

The transparent bed-sharing of Harrah's and Party Poker, and the slightly more subtle relationship between MGM Mirage and Full Tilt clearly illustrate that the big boys are making sure that they are ready to not only play in this market, but own it. Add Harrah's disclosure that they have spent over $400,000 in cash during the first quarter of the year as a registered lobbyist to build support for Rep. Barney Frank's "Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009", and their position is clear.

It is no secret that Harrah's and the others are looking for a way out of their recession woes. Rumors of bankruptcies are rife on the Vegas scene, and the income that would be generated by entering the online poker market would provide much needed cash relief, and do so almost overnight.

But here's the thing; where will that leave everyone else? Do you really think that Harrah's and their brethren are throwing their considerable lobbying efforts behind bills that would legalize online poker out of the goodness of their hearts so that we can all play in their sandbox? Not a chance!

MGM's statement that they support the legalization, regulation and taxation of Internet gambling is very telling, as they are, like Harrah's, already legal, regulated, and taxed. It is a much shorter road to travel for these companies to find a legal status for providing online poker than it will be for a company that is not already holding a US gaming license.

The prevailing opinion is that online poker will become available in the state of California first, as their state legislature has reportedly already reached positive decisions in this regard. If that happens you can bet that Nevada will soon follow, and then New Jersey. Regardless of how they fall, or even if it is a federal legalization, it would make sense that currently licensed operations, (and their bed-fellows), will have the first crack at the market, and it seems equally reasonable to assume that those operations will then take steps to ensure that they have market protection.

Providing online gaming licenses to non-US gaming operators, regardless of their "white label" status in other jurisdictions, is something that could take years to implement, if ever. Even pressure from the generally ignored WTO is unlikely to make a difference. The US made their opinion of the WTO's rulings very clear when they stripped gambling from its WTO obligations several years ago. It is obvious that they are going to conveniently continue to ignore them.

So where will that leave the established, reputable gaming companies that are operating in legal, regulated environs? Without a passport to the US market for sure. And for those that continue to operate in the US without a US license you can be sure that on the bequest of the Harrah's of the world that they will be forced out by whatever means are necessary. The US government will finally be armed with laws to do so.

As for the players themselves, and the large number of prospective players that have not yet played online because of trust issues, it will also be an easier decision for them to play with a brand that they recognize from down the road.

There is still no specific law that prohibits online gambling in the United States, and for those operators that are currently accepting US player action, this is the scenario in which they will remain the most successful. Unfortunately, in my opinion, change is inevitable.

Gian Perroni is the President of CanAffco.com, a Vancouver based marketing and affiliate management group focused on the online gaming sector.

The Sunday Times published this years list of the 100 wealthiest people working or living in Britain and i-Gaming executives featured heavily in the list with four PartyGaming executives among the top ten richest online business people, including PartyGaming founders Russ De Leon and Ruth Parasol ranked second place on the internet list with £700m. Group operations director Anurag Dikshit and marketing director Vikrant Bhargava were in third and ninth place respectively, with fortunes of £559m and £230m.

Bet365 founders Peter Coates and daughter Denise are sixth on the list, with an estimated £400m each, while online betting exchange Betfair placed three executives in the top 20. Betfair founder Ed Wray is the 11th wealthiest with £190m; Andrew Black is the 12th with £185m; and equity investment manager Richard Koch is the 17th with a company stake worth £129m.

The man at the top of the list however, is Peter Cruddas, founder and owner of internet securities dealer CMC, with a fortune estimated at £1bn. The Sunday Times reported that the Rich List was hit hard by the recession this year. The world economic slowdown wiped £155bn from last year's list, the biggest fall since the group was first compiled 21 years ago.

Steel tycoon Lakshmi Mittal has seen £16.9bn evaporate from his fortune due to the collapse of the world steel market this year, but remains the richest person in Britain with a fortune of £10.8bn. The Duke of Westminster is the richest Briton, and continues to occupy third position overall due to his real estate fortune of £6.5bn.