Archive for the ‘Industry News’ Category

MGM Supports New York Online Gambling Market

Monday, December 1st, 2014

While New York has been on the cusp of legalizing various forms of online casino gambling, and has been one of a handful of states that industry insiders believe will be the next to go live with real money wagering online, the fact of the matter is that the fuel supporting the latest push for legalization in the Empire State is coming from out West.

Let NY Play, is the latest proponent slogan for iGaming in New York. Social media outlets have been fanning the flames through this organization, which is actually coming from none other than MGM Resorts International. MGM is a huge gaming brand based in Las Vegas, Nevada.

So then why all the backing from a casino brand that doesn’t even have a land-based property or a stake in New York?

Well, New York is getting ready to move forward with granting four different licenses to develop online outlets, and while MGM is interested, it has no hand in the game other than possible future interests. MGM has lobbied in the state of New York before – specifically in support of the legalization of online poker.

While Let NY Play is gaining social interest online, MGM surely cannot be embracing the idea that New York will generate enough revenue from the get-go to stimulate the expansion of online gambling a la New Jersey, which is still struggling to generate increased online wagering income even though there are more than a dozen online casinos there.

But wait, in New York it’s about poker specifically. New York is a state that loves poker. MGM knows that New York residents bet as much as $110 million in non-regulated online poker activity. Further believing that NY could generate between $50-80 million in revenue each year, MGM may have designs on the future indeed. This estimate does not consider additional revenue the state would gain from the licensing process itself.

Still, is there something else propelling MGM in its support of NY so much? NY’s neighbor, New Jersey, has come nowhere near earning the revenue it originally predicted it would when gambling online went live over a year ago.

Needless to say, MGM officials are taking the “slow and steady” road, and believe that while there has been a slow start to the industry, the tables will turn eventually. After all, there are online casinos that are not based in the US still taking wagers from US players, and thereby cutting into the market.

Interest by many offshore and European online poker giants to move back into the US market may be the solution to the needed income. But the question remains whether or not US markets such as NY are ready to grant permission for the world’s most successful online poker brands to move in.

The fact that MGM owns half of the Borgata, which hosts the most popular online casino in New Jersey at this time, may be another factor. Perhaps MGM will go live via the Borgata, creating a site related to its New Jersey destination. There are rumblings in the industry that this is a possible outcome in the near future, but New Jersey is not New York.

Whatever MGM’s motives may be entirely, the state of New York is on the verge of legalization, indeed. As casino licensing gets underway, there are sure to be further developments regarding MGM’s support of online poker in New York. Time will tell what they are.

Big Gambling Brands Dying by Way of Netflix?

Saturday, November 22nd, 2014

CVC Capital Partners, the largest private equity firm in Europe, has recently given their vote of confidence on behalf of the online gambling industry. The private equity investors agreed to purchase a hefty controlling stake in the online gambling company, SkyBet. In fact, it was the largest purchase made by private investors in the quickly changing industry that is iGaming. At a sizable $1.25 Billion, this purchase secured for CVC Capital Partners is roughly 80% of SkyBet.

Seeded by the UK’s Sky Satellite Broadband Company (much beloved for their SKySports sector), SkyBet initially made it’s mark via online sports betting, and has since established itself in the realms of online poker and other online casino games. Having such a robust and respected private equity firm place it’s bet in favor of the company says a great deal about the shift that is taking place in general perception concerning the online gambling industry’s ability to be a thriving, dependable economic powerhouse.

This shift can be observed in multiple similar investments and partnerships that have begun to dot trade publications in recent years. For instance, when software conglomerate, Amaya, made their $4.9 billion buyout of the popular PokerStars, the credit division of the world’s largest private equity firm, Blackstone Group, backed the deal with a $1 billion credit line. This groundbreaking change in how mainstream business regards online gambling put banking heavyweights like Deutsche Bank and Barclays in the position of holding assets rooted in the online gambling industry. Not surprisingly, Amaya’s shares have enjoyed a swift upswing since.

What is of main interest here is the somewhat less hearty investment being made by private equity into the online division of the land-based casino giant, Caesars Entertainment. It has yet to be confirmed if this is a reflection on the current struggle Caesars’ finds itself in, or if it is a preference for the specialization that companies solely focused on online gambling offer. For example, which company would likely woo more investment at this point? Twitter, or a new Short form social media product created by Microsoft?

Well, it probably wouldn’t be going out on a limb to say that Twitter would win due to its advantage of having established the first product of this nature (nor ro mention the fact that all of the company’s assets are focused in that single area). This preference differs a great deal from the original predictions that land-based casinos would overwhelm the online market and take over with brand power.

Could land-based casinos go by the way of Blockbuster vs Netflix ? Luckily, given that Caesars is already working to get ahead of the curve, they are more likely to ensure their survival in a digital future. Other land-based companies do not seem to be quite as prepared. One way or another, a simple prediction to make is that as the world’s money holders become invested in the success of online gambling, the governmental resistance to the legalization of it will surely wither.

New Jersey to Regulate Skill Based Games

Tuesday, October 28th, 2014

In a move to boost online casino revenue, the NJ Division of Gaming Enforcement (DGE) is now taking applications from casino operators seeking skill-based provisions. This new decision comes even with less regulative standards (relatively speaking), while the processing of applications is to be done faster in order to meet the needs that the DGE is conveying in order to get the ball rolling. New Jersey regulators and operators alike have sought ways to integrate new advancements in gaming technology into the regulated market.

The massive popularity of online skill-based casino games calls for demand. Meeting this demand, the DGE is clearly willing to get in on the action more sooner than later. Skill-based casino games – wherein players are able to be engaged and socialize with one another – have become very popular. And it’s the software companies that should be thanked for the new technology-oriented generation of online gambling fans who are looking to wager more because the games are the most realistic they’ve ever been.

The new announcement coming from the DGE is of particular interest in the fact New Jersey regulators will be better prepared to process new skill based gambling online applications, thus ensuring operators faster results when seeking a license of this kind.

Currently in New Jersey, skill games fall under a New Jersey statute – that if approved – would permit casinos to launch their new platform games within two weeks. This is an impressive detail and one of great interest to entice current online casinos in the state to provide games with better odds. This speed of approval will make the state of New Jersey the absolute fastest processing of its kind in the US to market online gaming platforms of skill.

In essence, this new development is a ringing dinner bell for all online casinos to come forward with new skill based offerings for players, knowing the state will eagerly work with them.

While this is a great way to increase internet gambling revenue in New Jersey (perhaps a way to boost lagging income from less than impressive results in the nearly one year since gambling online became regulated in New Jersey), this type of enticement and speedy licensure for skill based games will be met with some resistance, as online casinos are typically more in favor of launching games with less favorable odds. However, new technology making skill based games very attractive to consumers demands results. The timing here is good.

Non real money wagering games are also part of the reason as to why casino games of skill with real money have become so popular. The social component of skill based games that are not being wagered with real money (yet), like Candy Crush and Words With Friends, is very helpful to the rise of online casinos providing more skill based. New Jersey seems to be responding to the trend of skill based popularity quickly. Other markets in the US should, too.

Applications are now being accepted. As such, games of skill could be launching at various New Jersey online casinos by early November.

Betfair Gets Six Month Extension in NJ

Friday, October 10th, 2014

New Jersey online gambling regulators have share some developments that will keep Betfair in the fold for at least another six months. Together, Betfair and Caesars Entertainment have reached a deal that will keep the online casino software company running in the Garden State for another half year or more. The deal has already been accepted by the New Jersey Department of Gaming Enforcement.

Just under a month ago, when Trump Plaza – Betfair’s brick ’n mortar partner for online casino wagering, closed up in Atlantic City – it was largely thought that Betfair would set up shop through another Trump property in Atlantic City – the Trump Taj Mahal. After all, both properties are owned by the Trump Entertainment Resorts. Betfair even had backend facilities for online wagering set up at the Taj Mahal.

Not so fast was the case, as Trump Entertainment resorts itself went under last month. Alas, Betfair has had its eye on the ball ever since learning of potential bankruptcies with the Trump casino brand. Within a few days of that news, Betfair was dealing with Caesars.

Because licensed software providers are required to work with one of Atlantic City’s land based casinos to legally operate online sites taking real money wagers in New Jersey and because so many casino properties in Atlantic City are already online with software brands, the need to find a new home could have been a bit dicey for Betfair.

The Department of Gaming Enforcement permitted Betfair to keep a license to operate for a short period of time while seeking out a new partnership. The new deal with Caesars will give Betfair some time to work out a longterm plan for its future in the largest online casino market the US currently has to offer.

The approved extension allows Betfair to run online from Bally’s Atlantic City, which is a well known Caesars sub-brand.

Betfair is based in the UK and is a long standing, yet somewhat beleaguered brand (as of late). The UK holds one of the most highly regulated and largest online gambling markets in the world. Interestingly enough, Betfair has had its share of battles regarding revenue generation in the steady but not entirely growing New Jersey market. A partnership with an aging Trump casino brand was probably not the best situation for the brand.

This could all change if Caesars takes the brand to its consumers with a fresh, new marketing strategy. After all, Caesars online casinos are the most successful thus far in New Jersey. BetfairCasino.com brought in a mere 7% of the overall New Jersey online gambling revenue just two months ago in August, which lands at a few thousand dollars over $700,000. It’s safe to say that the online gambling industry in NJ did not save the Trump properties in its last ditch chance to stay afloat.

Betfair’s Ultimate Gaming withdrew from New Jersey previously after the fledgling Trump brand had little ability to promote it in the manner that other operators were marketing their casinos online.

Another thing to consider is Betfair’s online poker site, which is another struggling site that even uses competing software – Ongame – with Caesars own poker room. Caesars powers its more successful WSOP.com poker room using 888 software.

Will Caesars move forward with two rooms using two different software platforms? That’s anyone’s guess, as the industry waits to see how the Caesars brand actually serves it to the market, perhaps in another, more successful way.

California Delays Online Poker Bill

Wednesday, August 20th, 2014

After a laborious 5 year span of trying to execute an effective bill to legalize online poker in California, it seems as though another year will slip on by until we see another attempt.

Many industry insiders would argue that it was largely expected that online poker would have a good future with seemingly swift legislature after the US government decided to leave the decision up to individual states for regulation of various forms of online gambling activity. Yet, it all seems practically lost, as attempt after attempt has been unsuccessful to bring forth a viable bill legalizing poker online in California.

Just last week, California lawmakers involved in getting poker legalized online came to the decision that bills in favor of legislation will have to wait it out again. California Senator Lou Correa actually vacated his current bill, SB 1366 altogether, and Assemblyman Reggie Jones-Sawyer has postponed his bill, AB 2291, for the time being.

When various states initially lined up in favor of online wagering activity after being given the green light to legislate, all eyes were on Nevada and its neighbor California, where many gaming insiders believed a business deal largely known as an interstate compact would be created without much delay. California was never in favor of legislating non-skill based games, but a deal to pool poker players from each state would have created extra revenue and make both parties happy.

In the timeline since initial buzz was created and several bills were put forth in California to get the ball rolling, many key topics have caused snags in the plan of California going ahead with online poker legislation. The future in California now depends upon the ability for lawmakers to iron out the hurdles at hand. The next time any possible advancement could take place is now December 2014, effectively making 2015 the next possible year to place any poker wagers online in California.

According to Jones-Sawyer, who is now effectively left holding the bag, the ultimate issue behind the bill’s shelving was that there was no longer enough time in this session to work out the language issue with the bills. He stated that he will have a new bill on the floor in December, essentially giving all stakeholders an additional five months to reflect. Others would say this is a calculated delay by proponents themselves.

There is heavy tribal involvement in the state of California, and it’s is widely expected that tribes will also use this extra delay as time to watch the Amaya deal unfold and learn a thing or two. Watching Amaya’s dealings within the New Jersey online gambling market will be a wise move as it could reveal important information regarding the outcome of PokerStars’ attempt at reentry into the US market via Amaya, which is wrapping up purchase of the largest online poker brand’s parent company.

Also at hand, and referring back to language issues, horse racetracks are involved in the proposed legislature in California. There is a potential for time-consuming legal challenges that could cause further delay with any online casino, gambling or poker legislature should the tracks not be included in the ability to join the market for online gambling in California.

Its is also expected that racing involvement – not necessarily wagering on races – but taking poker bets at tracks online, or any other aspect for that matter, would increase competition; But a racetrack’s overall effect on the market would be meager should PokerStars make its way back into the US fold. If a PokerStars deal is struck, a racetrack deal would inevitably materialize – sooner than later, too.

Until December, we’ll be watching the outcome of PokerStars via Amaya.

Caesars Entertainment’s Bet Smart Recieves Accolades

Friday, August 8th, 2014

Caesars Online Casino Play Responsibly

Caesars Entertainment, whose Caesars Interactive Entertainment subsidiary is operating three online casinos within the New Jersey online gambling market (read the OCS review of Caesars New Jersey Online Casino), is continuing to garner praise with its successful Operation Bet Smart program. This year’s Responsible Gaming Education Week (RGEW), held last week, honored Caesars Entertainment for its continued efforts to support healthy gambling, online and off.

Caesars was the initial casino brand to break new ground in combating problem gambling, and in fact, has been an advocate of this topic for some 25 years, even before online casinos took off. Operation Bet Smart was created many years ago and is still working diligently to ensure Caesars players at its online casinos and brick ‘n mortar locations are safe, secure and educated properly about problem gambling.

As the computer age has inherently changed the landscape of gambling, Caesars has kept up without missing a beat where proper game play is concerned. As technology has changed, policies and programs surrounding responsible gaming have changed as well – And Caesars Entertainment strives to continue with its award winning advocacy and awareness initiatives.

In 1998, The American Gaming Association (AGA) created RGEW to promote responsible gambling across the board in order to enhance awareness about improper gambling issues within the ever changing industry. What is interesting here is that Caesars was already anchored with the pro-healthy gambling environment even before the AGA created RGEW.

Caesars Entertainment has a history of working together with the US National Council on Problem Gambling since 1995 to develop the first resources to promote healthy casino gambling. In fact, Caesars helped the Council establish utilitarian resources, such as the first phone help lines. Caesars has since been awarded by the Council many times over.

Most recently, Operation Bet Smart has morphed into a major sector of the brand, and Caesars now heavily markets its awareness brand and continues to develop new initiatives and outreach programs designed to ensure that its business practices encourage responsible casino activity.

Caesars has used Operation Bet Smart to effectively train and certify more than 200 Responsible Gaming Ambassadors (RGAs) throughout the US gambling market. In addition to Operation Bet Smart, Caesars works to combat underage gambling with Project 21. These types of advancements have come in very handy since the online casino gambling industry has evolved into a multi-billion dollar industry.

Caesars’ notable achievements regarding responsible gaming include developing the very first self-exclusion feature where online casino and land based players are able to remove themselves from the ability to gamble online or off. They have even worked with developing software that tracks unstable behavior when placing bets online. These initiatives include the policing of proper banking transactions and services.

Caesars has spent nearly $3.5 million to develop defenses within technology to enforce its innovations and has even taken to the TV screen for advocacy of proper gambling whether from home or at a casino in person.

Last week’s Responsible Gaming Education Week is the perfect platform for both consumers and casino brands to better understand the very importance of safe gambling online and at casino properties located within regulated markets.

The three online casinos in New Jersey where Caesars Interactive Entertainment hosts gambling from include the aforementioned CaesarsCasino.com, WSOP.com and HarrahsCasino.com. All three casinos online have the support of all resources regarding safe, secure and healthy gambling.

While all major casino operators have various features in place for safe gambling, success-wise, there is no relative comparison to the support of proper online or land-based play that we see from the Caesars brand. The video below says it all:

Comparing Online Casinos to Land-Based Casino Gambling Addiction

Thursday, July 10th, 2014

HarvardDivisionofAddictionLet’s cut to the chase. The title of this post refers to the drama of Sheldon Adelson’s war against online gambling and his tirade claiming online gambling is evil and will lead to the worst addictive form of gambling ever. This, from a man who operates one of the largest casino brands in the world, and who amassed hundreds of millions of dollars from gambling revenue.

Beyond the hypocrisy and sheer craziness of Adelson’s heightening actions of being hell-bent on eradicating online casino gambling due to unprecedented addictiveness, I wanted to look into the real deal between online wagering and land-based casino activity pertaining to addiction.

Personally, I will never forget the first time I ever visited a brick and mortar casino. It was in Las Vegas, where Adelson has several high profile casino properties. I could feel my stomach drop with anticipation and I was overwhelmed and on sensory overload. I didn’t have a bankroll to speak of, but still had visions of losing the little money I did have. And yet, I was beyond seduced by the chance of winning. Swiftly, my thoughts were not on the losing but the winning. I didn’t care what time it was or what day of the week. I was inside a casino where money was waiting to be won. At least that is what all the signs eluded to.

The physical presence of being inside that casino was like nothing else I’ve experienced while playing cards at home with friends or spinning the slots on my laptop. This casino, like so many others, was enchanting.

Since that experience, I’ve witnessed online casino gaming grow into a multi-billion dollar industry within several worldwide markets. Likewise, the gambling online industry has seen its fair share of successes and controversy. But, is it really more addictive than land-based play? Really?

Just as computers have effected other industries like shopping and social activity, the digital age has affected the gambling industry. After all, computers have become designed so that you can do almost anything from home that you can do in other consumer sectors. I know people that don’t even leave the house to do most of their shopping, including groceries.

There are many attractive nuances about online casinos and I don’t have to mention the convenience of it all. But I honestly have to say that there is nothing like walking through an actual casino. I personally would have no problem taking more risks at a land based casino. Unlike Adelson, I believe the Las Vergas Strip offers me way more trouble than playing at an online casino, where limitations are enforced much faster I might add.

Historically, there have been issues with collecting reliable data based on the addictive nature when comparing online play versus land-based play. Misreporting of statistics (intentional and unintentional) by study participants also compromises findings. Who really wants to be truthful about their behavior if what they perceive it to be is wrong (whether it truly is or not)? But, the online gambling industry is much better tracked, as all data from game play is documented by computer action. Finally, there is now an opportunity to obtain large amounts of unbiased data about gamblers as they operate in regulated gambling casinos.

Overwhelmingly, data shows that casino players online show remarkable restraint. I have a very hard time believing Adelson, an otherwise successful business man, has not seen any of the studies conducted by the Harvard Medical School’s Division on Addiction.

Harvard conducted research about internet casinos, where several general conclusions about online casino player behavior has been concluded based on analyzing data of tens of thousands of sports bettors, online casino gamblers, and poker players over a period of two years. This research was in partnership with the well known casino brand, bwin.

This specific study showed that in each gambling category, most all players gambled infrequently and in moderation, while a small fraction of online players (1-5%) showed high amounts of game play that far exceeded that of the rest of the players.

This research shows that widely available online casino activity will not likely be any societal destruction, as Adelson has claimed. What’s more, the effects of the large amounts of increase in exposure to gambling online offers are actually relatively mild. Lastly, land based casinos simply pose more distraction, which leads to unfocused decisions.

So then, what gives, Adelson?  It’s not even about the casino games is it?

UK Online Casinos Busiest Since 2008

Thursday, July 3rd, 2014

UK flagsGambling online at UK online casinos is quite the hotbed of activity these days. Needless to say, the UK market has been very successful over the years; 2013 in particular, as it has been the most successful year since 2008. Of course, the last 5-6 years have seen growth in players due to a growth in marketing. Let’s just say that if you’ve been in the UK recently, you’ve no doubt seen road side signs and television commercials abound.

UK-based online casino companies generated gaming action to the tune of £1.06b in the 12 months leading up to 2013, up 16% from 2012. Numbers just released by the UK Gambling Commission showed online sports wagering revenue improved 17% to £879m. Sports wagering is wildly popular in many European markets, UK especially.

The UK market does not release official numbers as frequently as the US market, but perhaps this new release will prompt New Jersey lawmakers to look even closer at the opportunity to regulate wagering on sports. The topic is controversial and taking place in the Garden State now.

All forms of online casino gambling produced higher numbers, except bingo, which noticeably fell some 20% to £2m. This is in part due to the advancement in technology making bingo players even more confident to branch out to more skill-based casino games.

The number of player accounts and active online casino accounts both grew in number, with great marketing concepts and player promotions being a factor in this regard. Sports wagering has become impressively popular, with new player registrations at online gambling sites in the UK hitting 5.2m – the highest figure in 5 years.

Interestingly enough, these numbers reflect a mere fraction of the complete UK market, accounting for 15% because they do not include the true offshore side of UK-licensed online casino brands such as Ladbrokes or Will Hill. Both of these companies are huge, and rake in tens of millions on their own each year. The same goes for a large amount of operators licensed in such offshore jurisdictions like Gibraltar or the Isle of Man.

As of right now, however, this will all change October 1, when the UK’s new casino gambling laws take action. Let’s just say there’s a heated war taking place over taxes and it is not pretty, folks. The latest developments in this debacle have the Commission advising internet casino operators to submit their UK license applications by the end of the day, September 16, after which a two-week dead period commences. Two months after that, the UK’s 15% point-of-consumption tax (POCT) kicks in. And casino execs are not looking forward to it.


Combined wagering – online or off – in the UK, according to the Commission, shows total gambling market was worth £6.7b, which is an improvement of about $250m from 2012. This does not count the National Lottery revenue.

Brick and mortar casino earnings gained over 12% to £1.08b (representing 16% of the total gambling market). Table games action was a high performer. Roulette is the king of table games in the UK with Blackjack and Baccarat tied for second place. Keep in mind, Blackjack and Roulette were available at a combined 1,496 tables, while only 150 tables offered the game of Baccarat.

The UK has much to be pleased with, overall. New Jersey should take note of the sports wagering figures (even though it would compromise many things in the US regarding professional sports leagues). Stay tuned to see what happens in the taxation battle between offshore and other UK-licensed casinos.

Amaya Buys PokerStars for $4.9 Billion

Saturday, June 14th, 2014

PokerStars_AmayaThe deal is sealed, and what a deal it is. The online gambling industry has been anticipating an announcement soon, and it certainly got one: Amaya Gaming has purchased the PokerStars online poker brand for nearly $5 billion.

Due to the online poker brand’s historical legal drama, Mark Scheinberg (whose father remains under indictment in the US), has been declared a new billionaire. More precisely, he’s a billionaire a few times over, as Poker Stars agreed to be purchased for $4.9 billion in cash.

Poker Stars is based in the UK (Isle of Man) and was being operated by parent company Rational Group Ltd. before the sale to Canada’s Amaya Gaming Group Inc. Scheinberg is Rational’s CEO and owns 75% of company. In the deal, Scheinberg will leave his post at Rational upon completion of the transaction.

It can easily be argued that this father-and-son team was one of the first major companies within the online gambling industry. While internet wagering was around before PokerStars began offering online poker in 2001, the online poker brand now has more than 85 million registered online users from all corners of the planet.

Rational netted around $420 million after paying various taxes, interest and other fees from $1.1 billion in gross earnings during 2013, which is an impressive sale, considering Poker Stars’ “checkered” past of taking illegal wagers from US players before the US passed definitive online gambling laws. Many industry insiders would say that several brands were caught up in the gray area of online waging in the US during that time.

PokerStars Legal Issues

Poker Stars was certainly just one of a large number of online gambling companies taking real money wagers from US players while the analysis of US online gambling laws was being examined and argued in courts.

A little over 3 years ago, the US Attorney for the Southern District of New York charged Isai Scheinberg and 10 other company big wigs (from other gambling sites) with money laundering, illegal gambling and bank fraud. Fallout from the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which took place that April, prohibited companies from accepting payments for real money online wagers (later overturned by a DOJ ruling on the 1969 Wire Act).

After the massive crackdown, PokerStars settled for $731 million in 2012 to have charges dropped. The deal, interestingly enough, cleared the online poker giant of any wrongdoing within the eyes of the Justice Department. And yet, Poker Stars has been shunned in the US since then – most recently by the state of New Jersey, which suspended Poker Stars’ online gambling application for 2 years.

This new acquisition is most likely engineered in some part to boost the brand’s reputation for a much desired reentry into the burgeoning US market.

Since the settlement and subsequent advancements in online wagering activity in the US, Nevada, Delaware and New Jersey have launched online casino sites of their own. Clauses deemed “bad actors” in these states, however, exclude companies involved in the 2006 UIGEA crackdown.

The Chairman and CEO of Montreal-based Amaya stated that he is convinced US regulators will consider PokerStars in a different way under the new ownership.

Amaya holds licensure in several gambling markets throughout the world. We’re talking eighty different markets, folks, which is a big deal indeed. If you thought you’d seen the last of Poker Stars in the US, think again.

A Look Inside Worldwide Online Gambling Hurdles

Saturday, June 7th, 2014

There have certainly been more than a handful of legal issues related to online gambling popping up all over the map in the US. But what are the real reasons for such a continued uphill battle, especially considering that the US Government has opened the door for states to regulate their own online gambling activities?

It shouldn’t be a surprise that most heavily regulated businesses – the land-based gambling industry included – are shaped by politically motivated regulatory results. Nor should it be surprising that there have been a number of obstacles to overcome when designing the legalities of online casinos.

Sometimes, the hurdles are structural. Investigators from state regulatory agencies have been taken aback when finding out that even though they have police-like status as agents, this means little when trying to seek out private information from officials in places like China and even Japan. It’s hard to regulate globally, let alone domestically. So how does a country ensure proper regulation when it’s hard to find an ally to compare notes with?



Cultural differences are certainly a part of this struggle. In the US, casino operators go through certain vetting processes – some of which are deemed offensive to other countries. Also, there is a lack of camaraderie within many companies due to competitiveness. In other words, why share market secrets of success if it could encroach upon ones own success?

Beyond the latest struggles we’ve seen domestically, it is not just US casino gaming companies looking to expand their land-based properties into the online gambling industry. The struggle is worldwide.

The primary consideration is the integration of different cultures. For example, when online poker room operator, PokerStars, stated its intentions to purchase the Atlantic Club (formerly Atlantic City Hilton Casino), there were a myriad of issues brought to the table. Some were domestic, but the bulk of the problem was that the online operator’s track record in the US was marred.

Another example is Caesars Entertainment, which created a subsidiary, Caesars Interactive Entertainment, headed by the former CEO of PartyGaming. This Montreal-based division is responsible for the World Series of Poker and all Caesars Palace and Harrah’s online gambling sites. Needless to say, it took some strategic maneuvering to combine all of this.



It’s not just brick and mortar casinos diversifying into the online realm, either. A little over three years ago, Caesars paid tooth and nail to acquire Playtika. This Israel-based gaming company was bleeding money, and yet is was responsible for turning out some of the most popular social-based online casino games used in top social media platforms, such as Facebook. Even Bwin-PartyGaming announced its desire to enter the social gaming domain. However, Zynga, largely known as the biggest name in social gaming, has witnessed its stock rise and fall with every beat of rumor to and fro.

Thinking inside the US, Utah and Nevada share a common state line, yet they are seen completely different when it comes to policies toward gambling. What is interesting is that such a close physical location can yield such varying law. The issue at hand domestically is whether the state restrictions violate a higher law, like that of the United States Constitution.



Cultural differences arise at all levels of the law. In China, for example, gifts are a basic part of the social fabric. Family ties are strong as well. Even something as standard as giving a gift (in Asia) might be a federal felony under U.S. laws.



And how should an American gaming regulator react to a Chinese father giving his daughter $80 million to buy a share of a casino?

 Well, New Jersey regulators said no one gives a gift like that without strings attached. Since they didn’t like the father, Stanley Ho, they found his daughter Pansy unsuitable to be partners with MGM. Nevada regulators, on the other hand, had the same information, but decided that they would let MGM stay in business with Pansy, unless and until they saw some undue influence by Stanley.



Nevada was criticized for being too weak. But few Americans are aware that many people in China were offended by New Jersey’s decision.

The American regulatory system over casinos is a unique system, and many foreign territories consider the US gambling industry to be the most intrusive.

Nevada created its regulatory system in the 50’s, and for a very good cause. But soon thereafter, the Kefauver hearings associated Las Vegas casinos with the Mob. State lawmakers in Nevada were thus concerned that the US government could pose the opportunity to take over the running of casinos.



While Mafia involvement has been removed for quite some time, the tradition of complete control was accepted. Even casinos in Atlantic City were held to the same regulation standards.

In conclusion, should the US desire to stay the leader in legal gaming, online or not, it must take cultural differences into consideration. It is vital that this country consider the future of technology without prejudice, just as it must global values. Online gambling fans are not the enemy, but politics and cultural differences might just be.