Real Cash Gaming-the Next Billion Dollar Investment Opportunity
If more states liberalize their online gambling laws it could provide new opportunities for entrepreneurs and investors. Offline land based gambling is a well-established business in many states and some experts believe the online gambling market has the potential to overtake the traditional gambling market in annual revenues. In the UK and Europe online gambling is generating about $32 billion annually. In the UK the online bingo market has grown 155% in just a few short years and generates well over $1 billion a year. The $32 billion generated by online gambling is almost as much as the casino industry generates in the US each year. Juniper Research estimates that by 2017 gambling on mobile devices will bring in $100 billion worldwide.
Recently New Jersey Governor Chris Christie signed a bill that legalizes online gambling in the state. The law allows Atlantic City casinos to run websites with games such as poker, blackjack, online bingo and slots. The law requires gamblers to be physically present in the state while gambling online. Delaware passed similar laws and Nevada implemented a law that allows land based casinos to offer poker. If poker is successful the state may consider adding other games at a later date.
ROne company that is well known in the social gaming industry is San Francisco game developer Zynga. Zynga has an established user base and has several popular games on Facebook. But Zynga has a problem; players are leaving their games in droves. To keep the company profitable Zynga launched real money games in the UK and plans to expand into other European countries. Zynga has also applied for a Nevada interactive gaming license. Zynga has hired an executive from 888 Holdings and has been involved in lobbying efforts on the federal level.
Because of the lengthy and sometimes complicated licensing process several companies have partnered with land based casinos to speed up the process. European operators have years of experience in the online gaming industry and casinos are eager to put those skills to work. MGM Resorts and Boyd Gaming including the Borgata casino in Atlantic City have arrangements with Bwin.Party which operates several online gaming businesses from Gibraltar. Zynga has also partnered with bwin.party. Rational Group, the Isle of Man-based company that operates PokerStars, acquired the Atlantic Club in Atlantic City.
Some investment firms and hedge funds have policies in place that prohibit them from investing in gambling ventures but that may change as more states legalize online gaming. Chris DeWolfe, a co-founder of MySpace, is launching a gaming studio and investors include Jeff Bezon's, Founder of Amazon, and Eric E. Schmidt, Google's Executive Chairman. Companies reluctant to invest in online gaming will miss out on the opportunity of a lifetime!
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