If Elected President Will Donald Trump Endorse Nationwide Legal Online Gambling In The United States?

There has been plenty of press over the last several years indicating that Trump is a proponent of legalizing online gambling in the United States. Back in  2011 a Forbes article identified Trump as a proponent of "Online" gambling. His associating with the online poker business Ultimate Gaming  also indicates that he is interested in the online gambling space. Trump has also been involved in the land based casino business  having launched land based casino's in New Jersey. This indicates that Trump is not adverse to "Playing" the gambling card if he wants to fund certain US projects but is constrained by outstanding debt. 

To date he has not mentioned this association in his current bid to obtain the Republican bid for the white house. However, with current US debt is 13.8 billion dollars and   no signs of  decreasing his "trump" card could be to promote online gambling for the purpose of raising tax revenue to fund specific projects and initiatives. His endorsement of online gambling may also be leveraged to raise campaign funds from businesses interested in launching gambling venues in the US. 

Another factor impacting his decision on online gambling is Sheldon Adelson's stated opposition to online gambling in the US . Sheldon is also a land based casino operator with political connections that has flip-flopped on the online gambling subject.  It is still not entirely clear why Sheldon, a one time proponent to online gambling, has recently turned so negative on its proliferation in the US. However, Sheldon is a heavy hitter in terms of his wealth and political clout. With this said, his proposed legislation banning online gambling in the US has gone nowhere in congress. Clearly, someone with bigger pockets has decided that federal online gambling may indeed  be a very good source of tax revenue.  Also, Trump is competitive and  has a mind of his own which may factor into his support of online gambling in the US despite Sheldon's current position on online gambling. 

European online gambling regimes also need to be taken into account  when evaluating Trumps potential endorsement of online gambling legislation.  Europe has a hodgepodge of successful offshore hosted online gambling in Malta, Alderney and Gibraltar and country based online gaming. For instance The UK has a long tradition of offering legal online gambling which is generating hundreds of million pounds per year.  To date we have not seen any rollback of these venues. In fact many online properties are thriving and meaningful tax revenue is being generated by these properties.  

Trump has no fear when it comes to controversial issues. Online gambling certainly has been controversial in the US. However, it can also be a great source or revenue and jobs in the US. Restricting gambling to land based venues is a bit silly and arcane and there is no proof that online gambling has any negative impact on land based gaming revenues. The world has moved on and Trump may very well play this card if he is elected.

Kevin Flood is the CEO of Gameinlane, Inc. Gameinlane  has developed, launched and operated Internet gambling sites in Europe,  social casino,   freemium and subscription gaming in the US.   The company engages with land based casino  operators, online gambling operators, social casino operator and game developers to assist them in determining their strategy and implementation  of game content in an online context.   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 in addition to launching online gambling operations in Europe. Gameinlane is also startup "friendly" understanding the unique value new gaming companies bring to the marketplace.  Kevin frequently speaks at gaming conferences around the world providing him with a unique perspective on this very interesting business sector. Kevin can be reached at kflood@gameinlane.com  and or twitter  at @kflow1776.

Sobering Up On The Future Of US Internet Gambling(iGaming)

The launch of Internet gambling(iGaming) in three US states; Nevada, New Jersey and Delaware have many individuals and  groups discussing the early results of these implementations. Investors, land based casino operators, iGaming platform providers, legislatures, politicians, gaming content consumers and investors have been pondering the roll-out  comparing preexisting expectations against the reality of iGaming in the USA.

The subject matter is rich with comparisons and debates referencing  the European iGaming experience and US iGaming business  plans that where drafted prior to the actual launch of any live iGaming businesses in the US.  The salubrious and intoxicating expectations associated with US  iGaming are now being tempered against what is really happening.  As with any expectation jammed venture such as a new business or even a marriage, reality is always a wake-up call highlighting  the delta between expectations  and or the reality of a "relationship(s)".

iGaming evaluations can be  somewhat confusing because certain interest groups publicly predicted expectations they knew where overly optimistic. The goal, apparently, was to prognosticate potentially overly optimistic outcomes for the purpose of gaining public support for iGaming legislation or to obtain working capital  that would allow the prognosticator to enter the US market. One can argue the efficacy of this approach. However, this is a common strategy used by non-gaming related businesses promoting themselves for the purpose  of raising funds or going public on an exchange.

At two ends of the spectrum we have a binary evaluation of the roll-out assessing if the roll-outs have been successful or not. The middle ground is also being explored taking into consideration the preexisting goals of various participants and interest groups and what is actually happening. 

So what is the general consensus and how are each of the vested interests reacting to the reality of iGaming in the USA?

Investors - With revenues far from being close to iGaming business plan predictions and the overall roll-out across the nation being slow, it is highly likely that some investors are not pleased with what is happening. However, as previously stated, savvy investors know that the majority of initial business plans they review and approve include overly optimistic expectations.  The entry into new markets is always highly speculative even if a similar business model has been introduced into a another geographic area and culture.  The well healed investor has probably done some predictions of their own based on other historical introductions of regulated business ventures such as banking or investing.  In addition, their motivation to invest may be more closely allied with the limited supply resulting from  a regulated as opposed to "open" market.  Ironically, the gaming licenses themselves may be the real value proposition for investors.

Consumers/General Public - It is not completely clear as to what the reaction of the public is to "legalized" US gambling in certain States. Yes, the numbers and revenue are lower then expected. However, is this a result of overly optimistic business models, frustration/dissatisfaction with the iGaming proposition or overly restrictive  age/location scrutiny that excludes valid players. Is the heavy influence of European iGaming operators and their content causing dissatisfaction with the actual gaming content?  After experiencing the initial legalized iGaming content will seasoned iGaming players return to their tried and tested "illegal" sites that many of them actually "trust" and enjoy? 

State Governments/Legislatures - Certainly governments that forecasted optimistic iGaming revenues for their states are subject to criticism  if those revenue models are not being achieved. However, if the objective of overly optimistic revenue predictions was a planned strategy to assure that iGaming legislature would be passed, perhaps,  in a convoluted way,  the first step goal was achieved and it will be a wait and see situation to determine if the actual revenue generated over time will be appreciated and used in a way that will placate the voting public.  States like California planning to legalize iGaming are in a different situation. They have to take into consideration the new "normal" of iGaming proposing plans that contain more realistic  predictions. How will this influence state legislatures contemplating iGaming in their States?

Federal Enactment Of iGaming - We have seen from the likes of Sheldon Adleson and Steve Wynn that certain high profile US land based casino  operators are not in favor of federal or state legalization of iGaming. One can argue that their logic and reasoning for not wanting iGaming  is flawed.  Of course, their are equally politically powerful land based operators such as Caesars and MGM that are very active in iGaming in the US and will no doubt make their own public proclamations about their will to influence federal iGaming legislation.  We will see how the congress reacts to these competing interests. 

American Indian Nation - Although no native American Indian tribe(to my knowledge) has legalized iGaming within their territorial boundaries they are closely watching the events occurring in active iGaming jurisdictions.    They are sovereign nations within the US and have the legal rights, similar to state governments, to launch iGaming businesses. They are also land based casino operators in many US states providing them with  knowledge of  "gambling" regulation and operations.  Their relatively small land based consumer foot print makes their decision to operate iGaming operations more challenging as they look at the numbers in New Jersey, Nevada and Delaware.   Do they move forward at this point or do they wait at the sidelines and see how the federal debate evolves or perhaps collaborate with other tribes to create higher liquidity and lower risk for any one tribe?

In conclusion,  we are seeing  US states launch iGaming businesses  and we are gaining important insights into the economic impact of iGaming in the US.  Operators, governments and consumers are becoming more familiar with the right iGaming "product" for the US and are learning more about the operational reality of US iGaming. In point of fact, the current American iGaming model is an import from the European model where Europe   moved from a .com to a .co implementation. The impact, in Europe, of this change was quite sever causing a significant increase in the cost of operation and a decrease in overall revenue for operators. Some countries such as France have proven to be what one might characterize as a "failure" while other European country implementations have proven to be successful in term of "break even" financial models.   Canada has also moved along with their iGaming initiative conceding  control of those businesses to lottery operators in each province.

These experiences either directly or indirectly give America  plenty of data  to draw on to eventually come-up with an  iGaming business model that works for consumers, voters and legislatures.  We can all agree that there is still much to learn about the economic viability of US iGaming and how best to achieve a balance between the need to control, drive revenue, achieve profitability  and please the general gaming public. The public consumers of iGaming content will be the most important group to understand because they will make the ultimate decision if iGaming succeeds in the good old USA. 

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

  

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