Advertising of remote gaming

Offline Marketing and Online Gambling

I just do not get it

Is there a future in the industry?

I-Gaming: Profitability, Regulation, and Capital Markets

iGAMING GLOBAL TOP THIRTY

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Skin Wars

ARCADE GAMES – an extension to your skill games portfolio

Skill Gaming Opportunities in the U.S.

CONVERSION RATES

Forming strategic partnerships

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CASE STUDY : cryptologic

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Copper and Glass: Changing Alderney’s Landscape

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Currently there are four very strong poker networks

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There has been concern at the lack of government

Poker and the Law: Is it a Game of Skill or Chance?

Is there a future in the industry?
By Robin Chhabra, Leisure Analyst, Evolution Securities

As an analyst following  the online gaming industry I am regularly confronted with the following  remark, “The boom in online gaming stocks is no different to the internet boom and bust at the turn of the century”.  “Not true” I say, “The leading online gaming companies generate substantial profits and cashflow” and I then proceed to reel off an array of impressive performance metrics that have been continually served up by the likes of Sportingbet.  Undeterred, the sceptic attacks with “Ah, but it’s a fad isn’t it?” I’£ be honest with you, for a fleeting moment on 6 September 2005 when PartyGaming warned of slower-than-expected growth, which triggered a wholesale collapse in the value of online gaming shares, I almost agreed.  However, I referred to the cold hard facts, and logic kicked-in again.

So even if the size of the overall gambling market does not grow – which is in itself a pessimistic scenario – surely even the most hardened skeptics will agree that the general increase in broadbrand penetration, consumers’ rising comfort with transacting online and the emergence of new electronic delivery channels such as wireless (which could unlock the potentially huge Chinese market ) should lead to growth in online gambling for some years to come.  Furthermore, the best gambling operators, online or offline, provide great entertainment and as incomes rise, people spend an increasing amount of their wealth on leisure and entertainment services.  Gambling also provides a valuable source of revenue for Government enabling them to fund vote-winning increases on public services or decreases in personal taxes.  In short, there are several powerful and indisputable macro drivers at work.

      However, I know that Mr Sceptic has not been floored yet.  He (suffice to say in my line of work, it is invariably a he) will try to land one final blow – “the sector will collapse because it is illegal in the US”.  One aspect of the online gaming market that has surprised me has been its sheer resilience in the face of regulatory uncertainty.  For example.  Elliott Spitzwer’s attempts to frustrate the industry by making it difficult for US citizens to fund online gambling transactions led to the emergence of alternative (and hugely successful) payment processors such as Isle of Man based, Neteller.  While the uncertain regulatory environment is bound to create periodic ‘bumps in the road’, this episode highlights the industry’s ability to innovate.  Quite simply, the incentive to deliver inventive solutions is high given that the market is so large and the rewards for success so substantial.  Generally, lawmakers appear to be heading – albeit slowly – towards espousing a system of regulation as opposed to prohibition as they realize that the boundary – less nature of the Internet makes online gambling almost impossible to stop.