Apathy Will Kill Online Gambling Industry

We witnessed it this week.  European online gambling operators and their shareholders relied exclusively on the European Union to resolve the legal stranglehold placed over the industry by US lawmakers and the Justice Department.  They played their cards and busted.  By day's end, anyone involved in Euro i-gaming was left with the notion that they will have no other choice but to squeeze each other for a piece of the very small pie that exists in Europe, where a number of nations there have taken a similar stance as the US government.  The Asian market remains a puzzle to break into.

Gambling911.com was stunned when Edward Leyden of iMEGA.org, the only organization challenging the US on its own turf, stood up to take the podium during this past October's i-Gaming Expo in Barcelona and nearly half the room of European online gambling executives stood up and left the room.  Perhaps they would have stayed if a representative from the EU were in Leyden's place. 

Apparently, what Leyden had to discuss matters to shareholders of these European firms.  Every time there is news that surfaces where we learn European i-gaming establishments will once again be blocked from entering the US market, shares plummet.  This makes perfect sense.  When companies the likes of PartyGaming and Sportingbet were forced out of the US market in October 0f 2006, they lost millions of dollars and the share prices were practically torn to shreds in a single 24 hour period.  For these companies, the US represented over 80 percent of their overall business.  The US market at the time was barely even tapped into. 

Ladbrokes, which has never bore the effects of US policy since its previous parent company (Hilton) prevented the firm from ever entering the US market, has had a tough enough time breaking into other European nations (i.e. Denmark with its very savvy online gambling player base) while Sportingbet has already seemingly thrown in the towel where its one time 3rd largest online poker room, Paradise Poker, is concerned. 

'There had been a lot of hype in internet poker and that has now come off a bit,' said Andy McIver, chief executive of Sportingbet, announcing last month that revenues from his Paradise Poker site had almost halved to £4.6m in the last three months compared with a year ago.

"Apathy" is the main problem and it's not exclusive to the European i-gaming firms. 

"After passage of the Unlawful Internet Gambling Enforcement Act last year we would have meetings every few weeks where hundreds of operators would show up," said one Costa Rican-based operator, whose company still takes bets from Americans.  "It's amazing how short-sighted this industry is.  They have no idea that unless everyone starts taking an active stand, the industry will be done."

This operator has echoed the sentiment of others who want to push for a more organized fund raising drive similar to that of the Poker Players Alliance and, more recently, the bombshell "money bomb" drive for US Presidential candidate and supporter of online gambling, Republican Ron Paul.

"iMEGA is the only group challenging the UIGEA in a court of law," said this operator, who wished not to be identified.  "We need an industry-wide support of this grass roots effort and it needs to be monetary."  (learn more about iMEGA.org here)

The reason apathy has set in with the US facing online gambling brands has to do with the fact that there has been an ability in recent months to obtain payment processors from overseas.  That all ends once the banks officially "crack down", something they are yet to do.

Another reason for this apathy has to do with individuals waiting around for a positive outcome with the World Trade Organization decision that found in favor of tiny Antigua and its online gambling dispute with the US. 

"We can't rely solely on the WTO decision as that has not phased the US Government's position," said the operator.  "There needs to be real legal groundwork in place and within the US system of law, not just a third party international system that does not dictate US policy."

And yet another angry operator offered up a third reason for this apathy.

"The same ****ing blowhards that got us into this mess in the first place have fun away with their heads in the sand, leaving the industry for dead.  I think we need to get beyond these distractions and start working more cohesively."

Online poker interests need to do the same.  That sector has been heavily influenced by lobbying groups that will bleed the industry dry, a number of industry experts predict. 

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Christopher Costigan, Gambling911.com Publisher CCostigan@CostiganMedia.com

Originally published December 19, 2007 3:09 pm EST