Casinos would profit from legalized Internet gambling

The panellists, three of them Las Vegas industry executives, said just as casino expansion in New Jersey, in riverboat markets and on Indian reservations led to establish Las Vegas casinos growing their market share, the legalization of Internet gambling would give them the ability to reach out to new customers.

The panellists made their remarks on the first day of the two-day iGaming North America, a conference addressing aspects of Internet gambling, attended by more than 300 people at the Monte Carlo.

Internet gambling is illegal in the United States, but the debate is growing over whether to legalize, regulate and tax it as a new revenue source for governments starving for cash to pay for underfunded programs.

Some industry leaders think online gambling would take customers from traditional casinos, but the panellists, including Jan Jones of Caesars Entertainment, Art Manteris of Station Casinos and Doug Dalton of Bellagio, said they believe Internet gambling would grow the market and present opportunities for land-based casinos.

“The average gaming customer is around 50 years old,” said Jones, Senior Vice President of Communications and Government relations for Caesars. “The upcoming generation of gambler, the X and Y generation, makes all of their decisions on the Internet. They meet, they congregate, they make entertainment choices and I believe if we don’t have a significant presence, there is the likelihood that they will make other entertainment choices that are not gambling choices.”

The popularity of poker, the game that is driving the effort to legalize online wagering, has grown exponentially in the last decade. Mark Tenner, president of gaming consultant Concept Development Group, said about 250,000 people played poker online or in casinos 11 years ago. Today, there are an estimated 65 million players.

Manteris, Vice President of race and sports book operations at Station, said the failure of the horse racing industry to embrace new technology has led to its current financial struggles.

Asked how the casino industry would react if online gambling were legalized and it resulted in a flood of new competition, panellists said individual companies would have to step up their efforts to compete for customers.

A separate panel also addressed how Hollywood could impact Internet gambling. The convergence of television and online media could lead either to losing market share or opportunities for new partnerships, panellists concluded.

Vahe Baloulian, CEO of Red Planet Marketing, Vienna, Austria, said television has successfully grown markets in Europe by educating viewers about how to play games in an entertaining way.

Panel moderator Terry Debono, a partner in The Debono Group, Toronto, said television has built a large game-show audience over the years, and collaborations between casinos and shows like “Wheel of Fortune” have proved successful in the casino environment.

While most of the panels and presentations delved into online gaming implementation, marketing and policy considerations, one panel assessed the damage that occurred on “Gray Friday,” April 15, when prosecutors with the Justice Department filed a money laundering complaint that seeks US$ 3 billion being held by three online poker companies.

Legal experts Fred Heather of K&L Gates and Paul Hugel of Clayman & Rosenberg, who have practiced in New York, where the indictment was unsealed, said the case is mostly about accusations about what the poker companies allegedly told various banks about their transactions, with violations of the Unlawful Internet Gambling Act as the vehicle in the fraud and money laundering case.

The panellists said the odds are slim that the case would ever go to trial, because eight of the defendants are from out of the country and are expected to resist extradition. A settlement is the most likely resolution of the case, they said.

Panellists said it is an unorthodox fraud case because the victims in the case, the banks, were receiving money in the transactions. The companies are accused of hiding Internet gambling transactions by listing them as payments for sports equipment and flowers.