<<State must ready for Net bets
A gaming e-commerce expert says online gambling prohibitions hurt Nevada.
By Jeff Simpson
lasvegas.com Gaming Wire
Nevada's gaming operators are missing out on the lucrative Internet gaming market, and state and federal prohibition of Internet gaming costs Nevada's gaming companies and their investors the ability to compete and profit, said Eugene Christiansen, president of Christiansen Capital and a leading gaming e-commerce expert.
Speaking before the Nevada Gaming Commission's informational seminar on Internet gaming Thursday, Christiansen said Internet gambling is a fact of life and that prohibition will not slow its growth. He said the world has changed, and the policy question is not whether people will gamble on the Internet.
"They do, and they will, in increasing numbers," he said.
Rather, Christiansen said the important question is: "Who will provide Internet gambling, and how will it be operated, regulated and taxed?"
Nevada's gaming licensees, now prohibited by the state from owning or operating Internet gaming sites, are unable to capitalize on their brand names and their investors are unable to profit by the market capitalizations dot-com companies enjoy, Christiansen said.
He said brands are particularly powerful on the Internet, mainly because of customers' concerns with the credibility of Internet businesses. Such concerns are amplified in terms of gaming, and Christiansen said no current Internet gaming brands are powerful enough to inhibit competition.
That could change, and quickly, he said, citing well known land-based book retailer Barnes & Noble's less-than-stellar experience after it followed the well-branded amazon.com onto the Internet. He suggested powerful Nevada-based gaming companies would be able to use their brands to charge a premium price for gaming services and garner large market shares, but he said the time is slipping away.
Christiansen told the five commissioners, who were joined by the entire Gaming Control Board, former Gov. Robert List and about 120 observers in the standing-room-only Sawyer Building conference room, that Nevada's experience with gaming prohibition has failed in the past. He cited the state's previous rules against licensees operating foreign casinos, which was changed as foreign gaming markets grew.
Christiansen acknowledged a number of challenges faced by Web-based gaming operators, aside from social concerns about problem gambling. He said the political environment makes worldwide operation challenging, as the United States, Canada and others continue to prohibit Internet gaming.
Trust issues about the legitimacy of operators and concerns regarding the transfer of funds also pose challenges. Further, he said the Internet is not social, which is one reason he believes land-based, entertainment-driven gaming destinations such as Las Vegas are not in danger of being supplanted by the Internet.
On the other hand, Internet gaming growth factors are numerous and impossible to ignore, he said
"Massive global demand for Internet gaming is a fact of life," Christiansen said, explaining the increasing numbers of online households, improved broadband Internet access, and lowered barriers of entry -- computer and Internet access costs -- make Internet gaming growth certain.
Furthermore, he said, increased consumer confidence in online gaming operators because of recognized British bookmakers such as William Hill and Ladbrokes are fostering growth.
Christiansen said Nevada's operators' missed investment opportunities help other worldwide competitors.
"At some point," he said, "these competitors will begin eating Nevada's lunch.">> |
