Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Online Gambling, The Current State of Affairs


Published on

Powerpoint presentation given spring 2012 during USC's graduate studies program, Online Communities and Social Networking

  • Be the first to comment

Online Gambling, The Current State of Affairs

  1. 1. Agenda• 6 Disciplines• Global Market• Regulatory Confusion/Legislation (U.S.)• Black Friday• Pro’s & Con’s To Legalization• The Future• Factors For Success
  2. 2. Online Gambling: CategoriesSix Disciplines:1. Poker2. Casino Gaming3. Betting on Horse Races4. Betting on Other Sports, Such As Soccer and Baseball5. Online Bingo; and, Online LotteriesSource:
  3. 3. Online Gambling: Global Market Jurisdictions
  4. 4. Online Gambling: Categories
  5. 5. Online Gambling: U.S. Regulatory Confusion• Regulation varies: at the federal and state levels. – Uncertainty exists because rules and regulations were created pre-Internet.Source:
  6. 6. Interstate Wire Act: 1961 Outlaws the placing of sports bets over the telephone.Source:
  7. 7. Interpretations: Wire Act• Department of Justice: all forms of online gambling are illegal.• US Fifth Circuit Court of Appeals: applies only to sports betting and not other types of online gambling.• Supreme Court: has yet to rule as it relates to online gaming.Source:
  8. 8. Legislation: (UIGEA) of 2006Unlawful Internet Gambling Enforcement ActCame Fully Into Force In 2010 Illegal for banks and other institutions to transfer funds to offshore gaming sites in support of illegal online gamingDoes not:define illegal online gaming, does not apply toonline gaming that is conducted within theboundaries of a state or a tribe.Source:
  9. 9. Legislation: Senator Harry Reid2010:drafted a proposal into a tax bill to allowcasino companies to set up their own onlinepoker sites, exempt from UIGEA, for theircustomers to use.January 2011:Senate Republicans John Kyl and SpencerBachus blocked the bill.Source:
  10. 10. Online Gambling: Black FridayApril 15, 2011:US Department of Justice seized domains/bankaccounts of PokerStars, Full Tilt, Absolute Poker.However:U.S. consumers continued to comprise half ormore of world’s poker market—with privateoffshore operators.Source:
  11. 11. AGA: American Gaming AssociationSource:
  12. 12. Legalizing Online Gambling: Pro’s• Economy: stimulation through taxation. – A congressional report from November 2009 stated if regulated could generate $42 billion over 10 years.• New Job Creation: not only in gambling sector but other verticals too.• Safety: Americans who play can play safely with responsible, law-abiding operators.Source: ,
  13. 13. Legalizing Online Gambling: Con’s• Easy Access: – to computers will lead to gambling addiction and ease of minors to place bets.• Regulation: – legislation will be too heavily influenced by lobbyists.• Increase in Illegal Activity: – Cyber criminals target consumers and companies.Source:
  14. 14. 2012: Where Do We Stand?• June 10, 2011: – Nevada, Assembly Bill 258 passed the legislature and was signed by the governor and made effective. – Assembly Bill 258: prepares Nevada for the federal legalization of online gambling in the near future.Source:
  15. 15. 2012: Where Do We Stand?• Other States Following: – Massachusetts, California, Iowa and Florida are considering similar legislation.• 2012 PWC Global Gaming Report: – Overall, the message on the regulation of online gaming—especially poker— in the US is “watch this space.”Source:
  16. 16. Online Gambling: Taxation Methods• A tax on stakes: – levied directly on consumers when placing bets, tends to discourage consumers from participating.• Gross profit tax (GPT): – levied on operators’ winnings. *Most countries favor GPT option.Source:
  17. 17. Online Gambling: Legalized Countries• UK: – remains the largest online gaming market globally, having legalized it in 2005.• Italy: – introduced a licensing system that says sites must be licensed within Italy—uses filters to block Italians from accessing sites not licensed within the country. – Expected to overtake the UK as the largest legal online market.Source:
  18. 18. Online Gambling: Pro-Countries• Other Countries Moving Towards Legalization: – Greece – Germany – Spain – Iceland – Norway – Switzerland – Denmark – Belgium – Finland – AustraliaSource:
  19. 19. Online Gambling: Asia Pacific & Latin America• Philippines: – only country where online and mobile gaming is permitted, legalized in 2000 with PAGCOR as the sole operator.• Argentina and Chile: – only countries in Latin America where online and mobile gaming is permitted.Source:
  20. 20. The Future: What Can We Expect?• U.S: – tensions between intrastate regulation and the inherently location- independent nature of Internet services. – Smaller states will find it hard to sustain the growth of regulated services due to small player numbers, and subsequently, frustrated providers.Source:
  21. 21. The Future: What Can We Expect?• U.S: Online Poker Will Likely Be First In: – Next few years poker providers will be allowed to operate on an interstate basis in the U.S. This will likely lead to a legitimization of the market. – This regulatory change will represent a watershed for legalized cross-border online gaming, marking the start of a new era.Source:
  22. 22. Social Networking & Online Gambling: What Can We Expect?• Second Life laid the groundwork: – Pre 2007 they played host to hundreds of virtual casinos, lottery games, and other forms of gambling, using in-game currency that could be exchanged for real money.• Emergence of “Chiliconnect-like” sites: – enables players to share the results of their online poker games on social networks.Source:
  23. 23. Social Networking & Online Gambling: What Can We Expect?• Social networking sites: – key distribution platform for online gaming services, resulting partnerships between gaming brands and social networks.• Social Networking & Online Gambling: – Skill-based games and “fantasy” sports leagues.Source:
  24. 24. Social Networking & Online Gambling: What Can We Expect?• Mobile Usage: – especially significant, can seamlessly host web-based content making online gambling available anywhere.• New Hybrids: – Skill-based games and “fantasy” sports leagues.• Lotteries: – Continue to expand and grow online.Source:
  25. 25. Online gaming: complementary — not cannibalistic• Physical Casino Experience: – will continue to differentiate itself by enhancing the experience, therefor making online gambling an economic complement to off-line.Source:
  26. 26. Online Gaming: Key Success Factors• Providing A Unique Experience.• Understand Changing Needs & Behaviors of Consumer.• Keep Pushing The Limits of Technological Innovation.• Stay Flexible.Source:
  27. 27. Online Gambling: Future Possibilities• Mobile Casinos: – Integration of live casino games or games where players can compete against each other.
  28. 28. Online Gambling: Future Possibilities• Interactive Gambling: via TV• Gamification Companies: Move In