Speaking
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.”
Fahrenkopf cites growth of online gaming, importance to U.S. going forward
October 3, 2012
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