Sunday, April 22, 2012

Expansion of Online Gambling in USA Will Lead with Poker

Casino Journal magazine discussed the efforts to exploit online poker as a lead product in the establishment of the regulated internet gaming market in the US.  The article was part of the April 2012 issue.  With the recent DOJ policy change on online gambling's coverage under the Wire Act, which I posted on here, poker is going to follow the expansion of internet lottery as state lotteries are already expanding their operations online.

The Innovation Group published an estimate of historical and projected growth of online gambling in the US that was published along with the article.  The chart is below:

Source:  Doocey, P. (2012, April) Chipping AWAY, Casino Journal, 20-27, and The Innovation Group.
They are estimating a growth rate of over 29% given liberalization in the US.  I don't know if that growth rate can be achieved, but if those numbers are simply a return to what used to occur (or would have occurred) in the US if the UIGEA did not exist, then perhaps yes, these numbers are reasonable.  My view is that the growth rate will be lower for two reasons:
  1. Liberalization will take a longer time coming than anticipated, and
  2. The economic recovery will continue to be very slow and lethargic.
Even if the growth rate is on the order of 15% per year starting from a baseline of $4.3 billion in 2012, that would result in a number in 2017 of $8.6 billion.  That is almost double the 2012 projection, but well short of the chart's estimate of $15.6 billion.


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