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Thursday, March 5, 2015

Summary Of California iGaming Symposium 2015

Recently, I attended the  2015 California symposium on iGambling with the intent to understand the legislative progress made since the 2014 conference which I had attended. In 2014 there appeared to be a sense of optimism about the potential for legal iGambling within California in the  "very near future", which to me meant 2014 or early 2015.    Various assembly members were promoting new legislation and the native American tribes were working together  with their constituents to educate them on the opportunity inherent  in  a California legal iGambling environment. Passage of legislation seemed imminent in 2014.

Certainly, the fact that 2015 had rolled around without passage of  a "bill" was a warning sign that the ship was not as ready to sail as was implied in 2014.  Also, the dates of the 2015 conference had shifted at the last moment and I almost missed the conference. In at least one e-mail from the conference organizers I swear Gavin Newsom, the lieutenant governor of California was slated to speak. He was a no show at the conference. Granted this put me in a skeptical mood as the conference began.  In 2014 Richard Schuetz the newly appointed California gambling commissioner chaired the proceedings. Not so in 2015. Instead the conference organizers chaired the proceedings. Hmm?  Why were these various high profile individuals not in the spotlight??

The conference opened with a year in review of iGambling roll outs in Nevada, New Jersey and Delaware.  The delta between "expectations" and the commercial reality was debated. This was actually addressed in a very mature way pointing out that the "overly" optimistic predictions(New Jersey) and strange game content choices(poker in Nevada?)  made by politicians where done to gain legislative approval knowing full well that the numbers would not be there and that land based casino operators would be placated to move forward with legislation. The emergence of "compacts" between states to bolster player liquidity(especially poker) was discussed and endorsed by the speakers. The Sheldon Adelson iGambling challenge at the federal level was brought up and proved to be  a topic of discussion throughout the conference.

This was followed by speakers addressing the future of iGambling in California which was dominated by native American Indian tribal  representatives explaining how the California native American community was all in with the program. Very impressive actually given the number of stakeholders in this debate and the amount of education required to gain consensus in this very diverse community. Clearly a lot of time and effort has gone into this eduction process.

Next up was  a discussion on "Critical Issues" for iGambling going forward. This discussion was  a rehash of iGambling 101 with an explanation of geo-location, hosting, payment processing, affiliate network marketing, etc.   The one rather odd addition to this discussion was coverage of the "social" casino market. This actually seemed a bit out of place considering the fact that this sector has nothing to do with iGambling and is in fact an extremely successful, unregulated business model that is dwarfing iGambling as a preferred way for consumers to gain access to traditional gaming content. It has also been proven that their is little or no conversion or up-sell from social casino into iGambling venues. In most cases social casino operators do not want to be associated with and iGambling activity for fear of drawing attention to the possible cross over and regulation of their industry.

Is iGambling more addictive then land based gambling? This is a worthy topic indeed. With 7/24 access to online content the opportunity to engage in this activity in an addictive fashion is ever present. The panel indicated that the organizations that have worked with land based operators in the past to minimize problem gambling are hard at work doing the same on line. It remains to be seen how effective this will be.  However, The Europeans having been effectively dealing with iGambling problem play for a decade and have done a great job.

 One anecdotal mention on this subject is the issue of problem social casino gambling. Although I though a discussion of "social casino" at at iGambling conference was odd this subject did come to my attention as an online gambling consultant when a distraught mom contacted me about her sons Facebook social casino play that was resulting in significant credit card debate. The numbers were ominous. I tried to get in touch with Facebook directly to find out how they could help to curtail this individuals game ply. However, this was impossible without using the problem gamblers ID??? Sad really and something to watch out for in the future.

Assembly Member Mike Gatto Bombshell - The pivotal  point in the conference was the lunch time presentation given by Assembly member Mike Gatto. It appeared he was the replacement for Gavin  Newsom at the conference. Mike started out with an enthusiastic statement of his support for iGambling in California. He self proclaimed that we was the most active representative in the California legislature on behalf of iGambling and he continued on with an endorsement of legislation. He raised the hopes of everyone that 2015 would be the year for passage. He then abruptly  stated that his hopes for passage of legislation in 2015 were not good and  refused to answer any questions form the crowd indicating he "had a plane to catch". The audience was in complete shock with many people leveling the conference entirely after the lunch.  "Very bizarre." 

In conclusion, it is difficult to determine what is really happening in the California state legislature relating to legalized iGambling and why the state has decided to shelve legislation in 2015. One can only speculate based on some of the buzz at the conference.  It appears that Sheldon Adelson's sabre rattling at the federal level is having an impact on California's appetite to enact iGambling legislation until the federal issue is resolved. This is all very disturbing given the amount of time an effort the native American tribes have invested in getting legislation passed. 

The other perplexing issue that will have to be resolved before  California l iGambling legislation is passed  is the lack of engagement with American and especially California businesses in the process providing game content, hosting, security etc.   This is especially true for  Bay Area businesses and entrepreneurs  that have more then enough expertise in the area of secure cloud based secure hosting, game development, security, online marketing, software and hardware development, etc. In fact, Bay Area entrepreneurs, technicians and businesses have been been building and launching iGambling businesses for European deployment for a decade. Despite this we continually see Israeli and European operators being given preferential treatment in terms of iGambling platforms, hosting and security advice, etc. We certainly have nothing against these non-California business as they are good businesses. However, in a state that leads the world in technology, game development, virtualized hosting, investment capital, etc. it seems silly not to take advantage of expertise in your backyard. 

    Kevin Flood is the CEO of Gameinlane, Inc. Kevin, has developed, launched and operated Internet gambling sites in Europe.   Kevin and Gameinlane   develop "social and real money" 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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