Update: US Legalization Raises Optimism

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January 25th, 2011
Back Update: US Legalization Raises Optimism

A tipping point for the US online gambling legal affairs

According to the industry analyst Michael Campbell, who works for the Daniel Stewart broking company, there’s good reason for optimism, because the US online gambling market will “sooner or later embrace online gambling legalization in one form or another.”

Campbell recently pointed to the grand changes in the US scene recently, adding that increasing pressure from major land gambling companies and the difficult economic situation in a way resulted in several legalization proposals at both federal and state level.

Some of these initiatives were more effective than others – especially those in New Jersey and California. Therefore, if individual states legalize internet gambling, that may result in a domino effect on other states.

In Campbell’s opinion, there are two companies that will most likely close some B2B deals in the potential US online gambling market, and those are Playtech and Party Gaming.

“Bricks and mortar casinos have endured a torrid time during the recession and are seeking to explore new ways of generating income,” Campbell said, adding: “Our view is that online gambling will move ahead whether legislative change happens at Federal or State level or a combination of both.

“Poker may be the only product vertical to pass at Federal level, however we believe that individual States will legalise online casino and poker at state level, with New Jersey and California leading the way, we believe will cause a tipping point, whereby other state will follow.

“We expect to see legislative change implemented and licenses granted in 2011 or early 2012.”

In addition, he put a particular stress on the estimated value of the US gambling market, some US$90 billion annually. This number primarily represents the business conducted in the commercial casinos in Las Vegas, Nevada, and Atlantic City in New Jersey, as those two centers account for 37 percent of the total market.

There are two crucial stats to show the scale of the opportunity, Campbell said. First, the global online gambling market would be worth an estimated US$30 billion per year, of which the US would account for 27 percent or some US$7 billion. Second, before the ban was introduced on online gambling, this industry branch in the US actually accounted for about half the global market. "The scope for growth should legislation follow in the near future in our view is immense,” Campbell assessed.

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