All major segments of the gaming industry have had major international conferences in the past three weeks, and a high-intensity topic at all three events was positioning for Internet gambling, where America has lagged behind the rest of the world. This week, the gaming industry’s largest event, Global Gaming Expo, featured numerous discussions on Internet gaming, specifically the casino industry’s desire to legalize Internet poker in the United States. Also this week, the International Simulcast Conference addressed the racing industry’s need move forward on Internet wagering, even though racing has already reaped the benefits of online betting through advance deposit wagering in many states. And in mid-September, the topic was hot at the largest annual lottery gathering, the World Lottery Summit, although much of the conversation there included the need to focus on mobile applications.
The casino industry wants federal legislation legalizing gaming, and numerous entities are already getting Internet poker networks ready to implement if and when Congress gives the go-ahead. For the lottery industry, the Internet is a states rights issue – states should be allowed to decide what they want to do and shouldn’t have any federal legislation forced upon them.
Interestingly, at the World Lottery Summit a speaker from Camelot, operator of the U.K. National Lottery, mentioned that in Europe, the online poker bubble has burst to some degree as a result of regulation. When it was operated solely as an illegal product across borders, it had the liquidity necessary to generate large-scale participation. But as countries began regulating the game, that liquidity became fragmented and poker has declined as a result. So poker proponents here in the U.S. really do need federal legislation to cross state lines in order to build an effective product, and states will fight it.
The poker liquidity issue has also been raised in Canada, where Loto-Quebec and the British Columbia Lottery Corp. launched a Canadian poker network last year. While doing well, the game really needs more participation to grow. Manitoba will join the network next year, and it is hoped other Canadian lotteries will follow suit.
Just how much potential is there for Internet gaming in the United States? We should know a lot more when the Delaware Lottery launches Internet casino games next year. The Illinois Lottery launched a limited program last March, with just Mega Millions and Lotto, and the numbers remain small. The Georgia Lottery will launch a much more full-scale Internet program this fall, and that will also tell us quite a bit. Others are in development as well.
Around the world, lotteries have been offering Internet sales for years. The pioneer, Veikkaus Oy in Finland, has been doing it since 1997. Internet sales now account for more than 30 percent of its total sales, and that includes sports betting. Other lotteries with well-established programs have averaged more in the 10 to 20 percent range, with the higher numbers typically coming where there are sports and/or casino games available through the lottery site. In British Columbia, Internet revenues account for just three percent of overall business, and that includes lottery, bingo, casino, poker and sports. But the latter products are relatively new, and officials expect the business to grow now that a full portfolio is in place. It will be worth watching.