Big Money Heavyweights Fight Over Gambling

Fighting over gambling usually isn't about gambling, it's about who gets the money from gambling.  There are a couple of recent news articles that highlight this fact very well.  The first is an article about a couple of casino heavyweights (Genting and Las Vegas Sands) fighting for expanded gambling in Florida.  That article can be found here.  Now, the opposite side is Disney, which although not exactly pro-gambling, is pro-theme park and wanting to maintain their stronghold without new competition for tourism and convention dollars from additional casino gambling venues.  This no doubt is a money fight.  The argument isn't really if gambling is good or bad as Florida does allow casino gambling (eight Indian casinos are authorized).  However, a study did purport to state that new full-service casino resorts would generate an additional $1.5 billion in spending.  You know who is really winning in this fight?  Politicians and lobbyists.  Money is coming into the political fight big time.  The saying goes, "money is the mother's milk of politics" and milk is surely flowing into Florida's gambling expansion battle.  Note that Las Vegas Sands, controlled by Sheldon Adelson, is on the pro-gambling side in Florida.

Now the same Sheldon Adelson is backing the front group Coalition to Stop Internet Gambling, which is attempting to get Washington DC politicians to stop internet gambling.  So fight for gambling in Florida, but fight against gambling in Washington DC.  I'm confused...

Now, this coalition is being opposed by the Coalition for Consumer and Online Protection, backed by MGM Resorts and the American Gaming Association.  The story on that development can be found here.  Isn't it interesting that these players construct these proxies with names that sound good, but aren't really what they are about?  What if these industry heavyweights named their front groups in a way more in line with their objectives?  What if you had groups named Group that Opposes My Competitors From Making Money That I Can't Capture Because I Didn't Grasp the Market Opportunity or Group that Opposes Anything that Might be Good for that Guy Because Perhaps I Don't Like Him and it's Personal?  Wouldn't that be refreshing?

Again, lobbyists and politicians are loving it as the money is coming in!  Do you think this fight will be over soon?  As long as the money is coming in, the politicians and lobbyists really don't have an incentive to see this issue get resolved.  Stay tuned.

Analyst Reports Modest I-Gaming Revenue for USA

Contrary to some of the larger estimates of I-Gaming revenue in the US, an analyst has put forward some more modest numbers.  The story reported here, states that internet gaming will only generate $1.9 billion in revenue by 2020, not the $7 to $12 billion in revenue estimated by others.  You can click the hyperlink above to find out who was estimating the higher numbers.

This lower estimate by Eilers Research makes some points that I personally agree with, which helps buttress the more modest projections.  The main assumption for the lower estimates is the assumption that if the states do authorize online gaming, it will be poker only.  Now, it is almost a certainty that the first online gaming activity authorized would be poker, with other casino games being added later.  But I agree with the analyst that poker might only be the ONLY online gambling activity authorized.

If that indeed is what happens, all is not lost.  Poker would be authorized online, and operators can add casino games in a social gaming/subscription mode.  Social casino game play in the US can be a generator of revenue - see the activities of all the major slot vendors, particularly IGT's DoubleDown Casino on Facebook.

One assumption that is made by Eilers Research that I am not in total agreement with is that I-Gaming will not cannibalize the land-based casinos.  I will agree if only poker is authorized and other casino gaming will be of the social gaming kind.  Of course, online poker to an extent will cannibalize land-based card rooms.  If full-blown casino gaming is allowed by a state, that will cannibalize some of the casino business.