The industry as a whole is so keen to get back into The United States market. The goal itself seems to have become such a focus that some people within the industry seem to have lost sight of the reality of the situation.
A repeal of the UIGEA and the introduction of a regulatory environment for the industry in the US will certainly be a good thing on the whole but may not turn out to be the bonanza that some people are hoping for.
At the end of this process, the cost of doing business in the US could turn out to be very expensive. Quite a bit of the support for a version of Barney Frank’s bill is not based on a desire to offer US citizens a choice.
Much of it is based on the fact that online casinos can generate a lot of money for state and federal authorities and this combined with the fact that the industry will accept nearly anything to get back into the market has created a situation where greed on the part of the politicians will play a part.
The financial mood may have changed but the disdain that many politicians still hold towards online casinos is still there just beneath the surface.
All in all the current direction of things is a healthy one but perspective on the situation is also needed.
The business of predicting future events is both dangerous and seductive. Dangerous in the regard that it is virtually impossible not to look a bit silly when one’s predictions are looked at with the benefit of hindsight, and seductive in the regard that it is a basic part of human nature to have a tilt at guessing what is going to happen.
So, with that in mind, let’s take a look at something that has been developing for quite a while now and looks set to continue in the year ahead.
Going back a number of years the online casino industry was like any other Internet based business in that it was virtually completely international. Different languages were catered for but the customers came from everywhere and the casinos were based basically anywhere.
Then the specter of legislation and heavy regulation meant that casinos could only be based in certain jurisdictions. At this stage the customers still came from everywhere.
The next step for authorities was to try to curtail consumer activity as well.
All of the problems that have arisen out of this have caused an localized element to creep into the industry where casinos are set up in certain jurisdictions to target customers in certain jurisdictions.
The general movement by governments to introduce regulatory environments rather than outright bans looks set to increase both the level and speed of localization of the online casino industry in the coming year.
While it would not be safe to assume that the current delay on the full effects of the online gambling ban in the Untied States will lead directly to new legislation, it would be fair to say that over the longer term, the handling of the subject of online casinos in most developed countries is moving towards a regulatory rather than a prohibition stance.
During a period of severe uncertainty over the last few years we have seen a lot of consolidation driven by the insecurity that has been underpinned by this situation.
Some people have suggested that clearer regulations across most of the major jurisdictions would halt or reverse this trend.
The industry is still only in its infancy in broader business terms and has been maturing in a lot of ways even allowing for the difficulties of the last couple of years.
Consolidation is very much part of a maturing process like this and clearer regulations could in actual fact accelerate this process rather than slow it down.
Ultimately, we will have to wait and see how things actually pan out in many different regards but the presumption that consolidation was being driven purely by legislative difficulties is a dangerous one.
The entire online casino industry is buzzing about one story today. The Obama Administration has delayed the full enforcement of UIGEA for a 6 month period.
Before this announcement there had been a tricky situation developing where the momentum behind Barney Frank’s proposed bill to regulate online gambling had been growing and at the same time law enforcement agencies had been ramping up their efforts to be ready to enforce the full compliment of measures allowed for in UIGEA which was originally passed into law in 2006.
This latest move by the Obama Administration has at least put this dichotomous situation on hold for now.
This 6 month period now at least gives a window of opportunity to Barney Frank and his bill’s supporters to actually get something passed into law that would regularize the situation properly.
Unfortunately, time is still of the essence as six months is a very short time-frame when looked at in the context of how long it can take for a bill to actually be passed into law.
ON the upside, a lot f the legwork has already been completed so Frank and his bill\s supporters will certainly be able to hit the ground running in their attempts to make something positive happen in the six month period.
It was another mixed end to the week’s trading for the big brand names in the online casino world. There has always been a hint of suspicion that many analysts simply do not fully understand the nuances of the cut and thrust of online casinos.
Certainly, recent trading has not really been in line with the type of numbers that one would expect to see based on the short term information that has been available to the market.
Let’s take a quick look at some of the more volatile movers for Friday November 13th 2009.
Cryptologic shares dipped heavily on Friday. At the opening of business the value of shares was standing at 3.81 and 3.7856 was the share price by the end of trading. That price is 7.51 percent lower than the Thursday November 12th price of 4.07 and leaves the price 6.98% lower than the 4.05 on Wednesday.
Friday also saw by contrast a big increase in the share price of William Hill. 183.30 is what the shares stood at at the opening of business and 189.00 is where the shares stood at the closing bell. That is 2.43% up from 184.40 on Thursday November 12th and is all of 6.77% up from 176.20 on Wednesday November 11th.
The share price of PartyGaming was another one to get a heavy boost on Friday. 253.80 was the standing of the shares at the day’s start and 256.50 was the standing of the shares at the close of business. This leaves the price 1.24% up on the Thursday November 12th price of 253.30 and is 3.27% higher than the 248.10 from 2 days ago.
We have been experiencing some quite volatile trading of shares in the online casino sector of the market recently and the week opened with more of the type of uncertainty that we have been seeing of late in the sector.
William Hill stock went up on Monday November 2nd 2009. 168.70 was the share valuation at the opening of business and the share price was 170.00 at the end of the trading period. This price is 1.1% up from 168.00 on Friday October 30th this of course, gives us the same as last Thursday.
PartyGaming shares by contrast, dipped on Monday. At the start of the day the value of shares was 232.00 and the value of shares was 222.80 by the end of the day. That is all of 2.73 percent down from 228.90 on Friday October 30th and is 0.94% lower than the 224.90 on Thursday October 29th
The share price of Cryptologic was another one to take a hit on Monday. 3.94 was the share valuation at the opening of business and 3.80 was the valuation of the shares by the conclusion of business. This gives a price that’s 3.68 percent lower than the Friday October 30th price of 3.94 and leaves the price 5% lower than the 3.99 from Thursday last.
These type of numbers illustrate the tentative feelings that the market has been having towards the online casino stocks and well just have to wait to see if things settle in the coming days.