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The intense mainstream press
interest in U.S. land casino ambitions toward online casinos
gambling possibilities continued last week Reuters and other
wire service reports examining the delicate online casinos
situation. Online casinos have sometimes been seen as a threat
to land based casinos and other times online casinos have been
examined as a gift to the future profitability of the gambling
industry in general. Clearly, land based casinos have taken a
turn and now support online casinos more than ever before.
Earlier, comments by the AGA and by major U.S. land casino
companies suggested a growing interest in gaining access to the
growing universe of gamblers at online casinos, although
companies emphasized that they are not losing customers to
foreign operators that offer wagering at online casinos.
Speaking about online casinos, Alan Feldman, the spokesman for
the United States land based MGM Mirage said, "It represents an
enormous opportunity." The spokesman for the world’s second
largest gaming operator also added, “And it is an opportunity
that is being completely handed to foreign companies right now."
Standing in the way of this
potential online casinos and land based casinos windfall is a
1961 federal law that forbids interstate telephone betting that
the U.S. Justice Department has said also applies to online
casinos, claiming that it is illegal for U.S. companies to offer
online casinos. Worldwide revenue from online casinos increased
to about $12 billion last year from $3.1 billion in 2001 and is
expected to hit $24.5 billion by 2010, according to estimates
from Christiansen Capital Advisors. U.S. residents now make up
about half of the online casinos market. The number of Americans
who placed bets at online casinos doubled in 2005 to about 4
percent of the adult population, or about 8 million people,
according to a survey by the American Gaming Association, an
industry group that represents U.S. casinos and related
companies.
"It is a new place for
people to gamble," said Eugene Christiansen, a consultant with
Christiansen Capital. "These are big businesses." MGM Mirage
launched an Internet gambling site branded PlayMGMMirage.com in
2001, but shut the Web site down in 2003, as it was not allowed
to serve U.S. residents. "There is no business if you keep out
everyone from the United States," Feldman said. "Some of our
companies would think of it as a missed opportunity," AGA Chief
Executive Frank Fahrenkopf said. "Most of our companies view
Internet gambling as possibly another profit center." Companies
such as MGM Mirage and Harrah's Entertainment would almost
certainly start Web sites if Internet gambling were legalized in
the United States, Fahrenkopf said.
Still, he added that U.S.
gaming companies did not see Internet gambling as a threat to
their business, as more than half of their revenue now comes
from non-gaming activities that could not be replicated. "I
would not be surprised if there were some compromise passed
within the next two Congresses," said Harold Krent, dean of the
Chicago-Kent College of Law. |
