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Wednesday, August 20, 2014

More Indication Of Challenges With The American Approach To Legalized Online Gambling

The poker and gaming blog AgentMarco was first to break the story that the Santa Ysabel Native American Indian tribe in Southern California has decided they are frustrated with  the California legislature and their own tribal compatriots approach to legalizing online gambling in California.   This frustration has lead them to go rogue with the announcement that they are going to launch their own online "real" gambling poker room for California state residents without any confirmed  California legal authority to do so.

They are claiming that the American Indian nation is a sovereign nation within the United States and ,therefore, has the right to offer Internet gambling to California residents.  This is further confirmation that California and other  states in the  United States are struggling in their attempt to offer Americans safe and commercially viable Internet gambling content. Governor Brown's recent decision to  engage outside gaming attorneys is another indication that Sacramento  is pondering  how best to enact legal Internet gambling in California.  This confusion, combined with  historical American Indian rivalries is causing some tribes to become frustrated and impatient with the "process".

    The Sheldon Adelson Federal initiative is creating even more confusion  despite its irrational allegation that Internet gambling will hurt land based casino operations. Clearly there is no evidence that this is the case putting into question what  is Mr. Adelson's point and goal?

So what is going on here? The Europeans have had legal online gambling for decades and there is no indication that it fosters under age gambling or  crime syndicate involvement. Granted, Europe does not have a robust land based casino industry. Therefore, there is no way to determine from their experience if online gambling will steal customers away from land based operations. However,  illegal online gambling has been around for 20 years and has specifically targeted US citizens with great success. The biggest fear for illegal online gambling operators  has been the potential of a "legal" US gambling regime forcing the illegal sites  into oblivion.  Why do respected business owners and politicians want to encourage illegal gambling?  

It is also clear that the expectations for legal online gambling were greatly inflated to encourage the passage of Internet gambling law in the US. The reality of the commercial viability of legal Internet gambling is now being tested in Nevada, New Jersey, Pennsylvania and Delaware.  What will be the outcome of this experiment?  It is already clear that in some of these states reality is far different then the expectations set prior to legalization. 

Another juggernaut for the land based casino advocates is the amazing popularity of "Social Casino" It far dwarfs the player numbers compared to Internet gamblers. Ironically, the typical social casino player fits the exact same land based slot machine player profile. Ironically, it has no regulation and does not appear to need any. The irony of all of this is that social casino has no "cash out" resulting in players contributing but not financially benefiting.  

In the end  de-regulation of  Internet gambling, slowing the state by state proliferation of iGambling  or not legalizing iGambling in the United States is not going to stop Internet gambling in the US.  Also deigning the importance, by land based casinos, of the online channel is a bit nihilistic and potentially  self destructive for their  businesses.   Many land based US casinos and casino suppliers are "all in" with both iGambling and Social Casino. These early adopters are the winners in all of this. This may be the real reason Sheldon Adelson and Steve Wynn are trying to stop or slow down legal iGambling in the US. Their competitors are way ahead of them already and they realize they may not be able to catch them.

Kevin Flood is the CEO of Gameinlane, Inc. Kevin, has developed, launched and operated Internet gambling sites in Europe.   Kevin and Gameinlane   develop "social" casino games for third parties. Kevin has worked for and with US land based casino operators helping them evaluate social casino and iGaming platforms for the purpose of joint ventures and acquisitions. Kevin can be reached at kflood@gameinlane.com



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