The Economist Takes a Look at Internet Gambling
July 14, 2010 (CAP News Wire) – Widely considered to be the leading economic affairs publication in the world, The Economist commands the attention of the entire international business community.
So it’s a clear sign that the world’s business community is becoming more and more aware of the legal and regulatory issues facing Internet gambling in the U.S. – and the high cost of this law on international business – when the subject gets a write up in this London-based mag.
In a detailed, 13-page “Special Report”, The Economist focused on the popularity of Internet poker in the U.S. and how the current anti-online gambling law, the UIGEA, is stifling the potential billions of dollars that industry could make.
Of course, a magazine called The Economist is going to run down the numbers: “In 2007 nearly half of America’s population and over two-thirds of Britain’s bet on something or other. Hundreds of millions of lottery tickets are sold every week. The global gambling market is estimated to be worth around $335 billion a year. Last year Las Vegas alone raked in gambling revenues of $10.4 billion and Macau $14.7 billion.”
“H2, a gambling consultancy, puts the global online-poker market at $4.9 billion, of which America (where the game’s legal status is dubious) accounts for $1.4 billion,” the article also states. “In absolute terms online gambling remains a small part of the global betting market: a mere 8% in 2009, with revenues of about $26 billion, according to H2. But last year it rose even as the overall market fell. In the coming years it is expected to grow even more: 13% a year, says H2, with revenues rising to $36 billion by 2012.”
The Economist is a bit different than similar news-oriented magazines in that it isn’t afraid to throw out its opinion on occasion, too.
“Government prohibition of online gambling has worked about as well as prohibition of other online content, which is to say it is observed mainly in the breach,” the article continues. “America remains the world’s biggest single online gambling market by far, despite the passage in 2006 of the Unlawful Internet Gaming Enforcement Act (UIGEA)—a provision tacked onto a port-security bill that prohibits the transfer of funds from a financial institution to an online gambling site. After the ban some established sites closed down their American operations, but others filled the void. Americans are gambling roughly the same amount online as they did in 2006.”
“The laws may be muddled, but people are betting anyway, even where it is illegal to do so.”
The Special Report is an exhaustive analysis of the online gambling industry, filling 13 web pages and leaving no part of the story untouched. It’s recommended reading for this interested in the business side of the online gambling ban, and for those fighting the big poker “skill vs change” fight.
“[T]he view that poker is indeed a game of skill is gaining traction. A 2009 study carried out by Cigital, a software consultancy, analysed 103m hands of one of the main varieties of poker, Texas Hold ’em, played at Pokerstars.com, and found that over 75% of them were decided before a showdown. They thus depended far more on the players’ betting decisions than on the cards dealt.
“Similarly, Garry Kasparov, a chess grandmaster, argues that poker offers lessons on chance and risk management that even his beloved game cannot.”