ONLINE-OFFLINE GAMING
Double or Quits?
A
mazon didn’t quite wipe out the world’s bookstores, you can still buy CDs despite iTunes, and plenty of shopping malls have survived the onslaught of eBay. But e-commerce is evidently here to stay, and
the casino sector is no different from any other in seeing business move online, although regulatory issues have probably slowed the revolution.
Researcher H2 Gambling Capital, for example, sees the global online gaming market growing about 42 percent between 2008 and 2012, from $21.2bn to $30bn. And what’s really significant is not just the bottom-line numbers – which will make the worldwide online market roughly comparable to the U.S. land-based casino market – but the rate of growth: over those four years online will soar by 42 percent while the land-based gaming business (including sports betting, Poker, Bingo and lotteries) grows by a respectable enough, but nevertheless dramatically smaller, 15 percent.
It doesn’t take a mathematical genius to see that if
those rates of growth are sustained, online will eventually overtake land-based gaming – and the gap will be exacerbated by the reality that some (though by no means all) online spend is being taken directly away from the land-based segment.
…suppliers that do this are well positioned to assist land-based operators in the migration to online.
Naturally, the “if” is a big one, and in no business
do growth rates continue unmodified forever. But there is certainly scope for a great deal more expansion, particularly as huge markets such as the U.S., Japan, China and South Korea still remain largely untapped, and as smart phones now appear likely to become ubiquitous, allowing everyone to carry a mobile gaming platform in their pocket.
And it’s a trend that has attracted the attention of
28 MAY 2010
Pastures new
Among the land-based firms which have embraced online are Casinos Austria with its new platform launched last month, along with Gala-Coral, Ladbrokes and Rank in the UK. Harrah’s has perhaps the highest Web profile of the U.S. land-based operators through its Harrah’s Interactive Entertainment operation.
However, other major operators such as Las Vegas Sands and MGM Mirage are also understood to be studying the market closely, although MGM’s brief excursion into online gaming at the beginning of the decade was quickly abandoned.
From a technological point of view, the aspect of online-offline cross-fertilisation that may hold most
Casino operators and vendors alike increasingly believe that their future lies in serving both the land-based and online markets, reports
Barnaby Page
land-based gaming firms both major and minor – one that is closing the historically wide chasm between the online and land-based sectors, with both operators and vendors now striving to play in both markets.
Going online will not only help casino firms hang
on to any existing revenue that is drifting away in the direction of the Web, of course (and some believe that the worst of the revenue loss is already over). They will be able reach new customers, too. “The online gambler is often a loner,” Joseph M. Kelly, Professor of Business Law at the State College of New York in Buffalo, was recently quoted as saying. “He is not the kind of person who would go to Las Vegas and play Blackjack or Craps.”
And online is the right model for the times,
according to Warwick Bartlett, CEO of Global Betting & Gaming Consultants. “As consumers stay at home rather than get the car out, fill it with expensive petrol, drive to a gambling location, and buy food and beverage at venue prices, the option of staying in to gamble has become more economically attractive,” he says.
“Add to this the continued rollout of broadband which enables customers to access information faster and thus achieve better value and you can see that this business model has resilience,” Bartlett adds.
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