Fahrenkopf cites growth of online gaming, importance to U.S. going forward
October 3, 2012
at the iGaming Congress at G2E, Frank Fahrenkopf, president & CEO, American
Gaming Association (AGA), said online gaming’s transformation of the global
gaming industry is spreading to the U.S., but he was cautious about the
prospects for federal legislation in the current congressional session, which
the AGA deems critical for the sector’s domestic success.
“There’s no doubt the Internet has forever changed our industry,” said Fahrenkopf. “Very few could have predicted how quickly the online gaming sector would grow. As technology has advanced, online gaming has expanded exponentially, growing from a niche market to an international giant.”
Citing research by research done by H2 Gaming Capital, Fahrenkopf said there are approximately 85 countries that have chosen to legalize online gaming. It’s estimated that about 33 million players worldwide will gamble online with real money, generating total gross revenues of about $34.9 billion. These are numbers generated with only minor participation, about 10 percent, from players in the U.S. According to H2’s research, the Middle East and Asia, due to the growth of brick-and-mortar casinos there, have the potential to overtake Europe as the largest online gaming market within the next few years.
As another example of how this sector continues to grow, another study shows that online casino-style gaming via social media platforms is a $1.6 billion market and will grow to $2.4 billion in the next few years.
“These numbers help drive the point home; online gaming isn’t just another trend,” said Fahrenkopf. “It’s a critical underpinning to the evolution and future growth of our business.”
Here in the U.S., where millions of Americans are gambling online, the future of online gaming has changed substantially since G2E last year. No event has complicated the future more than the reinterpretation last December of the Interstate Wire Act by the U.S. Department of Justice, Fahrenkopf said. Encouraged by that decision, Nevada and Delaware have already taken steps to expand into the online gaming realm, and Illinois has begun selling lottery tickets online. Nevada was the first state to legalize intrastate online poker and in June began issuing licenses to several entities that may begin operating within weeks. Delaware has authorized an even wider array of online casino-style games with expectations for launch in 2013.
“The entire gaming industry is anxious to see more clarity for the legality of online gaming,” said Fahrenkopf. “The AGA supports states rights to license and regulate online poker, but not without federal minimum standards that address consumer protection, prevent underage gambling, and promote responsible gambling. We continue to reiterate the need for Congress to enact federal legislation that lays out a clear regulatory framework for Internet poker. The AGA and our member companies have been delivering a very clear message to Congress that, without action, we will see states legalize online gambling one-by-one leading to a patchwork quilt of rules and regulations that we believe would make oversight very difficult and put customers at risk.”
As for the prospects of such a bill this session, Fahrenkopf said that “it’s no secret” that Senators Reid (D-NV) and Kyl (R-AZ) have been working for many years on legislation that would legalize online poker, and that such work is ongoing with no clear outcome in sight. “I know there’s been news coverage recently of a version of a bill, but a third of the U.S. Senate and the U.S. House face an election in just about 30 days,” he said. “It’s clear that if any online gaming legislation is to pass, it will be following the election during a lame duck session of Congress. Introduction of such legislation is no guarantee of passage. I have told my board members that we are an industry that depends on luck; we gotta be lucky to have this happen this year. What we can say is, no matter what Congress does, based on the growth trends in this sector and the actions of the various states, it’s not a matter of if, but when online gambling will be legalized in the United States.”
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