Friday December 20,2013 :  A MORE CONSERVATIVE LOOK AT THE POTENTIAL FOR U.S. ONLINE GAMBLING
 
Latest Eilers Research report less optimistic than previous predictions
 
The latest Eilers Research report on the business potential for legalised online gambling paints a far more conservative picture than previous estimates by other independent companies, but argues that the time it takes for state-by-state legalization, and the fact that some states may only opt for US online poker, is likely to drive down the net result in revenue terms.
 
The bottom line on the Eilers projection is that the total US legalised online gambling market is unlikely to exceed $2 billion by 2020…an estimate that suggests that current projections vastly overstate US i-gaming potential.
 
Titled “The U.S. iGaming (Real) Opportunity” and authored by respected analyst Adam Krejcik, the estimate is based on solid and comprehensively researched industry numbers…and it flies in the face of previous predictions by H2 Gambling Capital ($7.4 billion by 2017) and Morgan Stanley ($9 billion by 2020) as reported in previous InfoPowa bulletins.
 
Krejcik acknowledges that a number of US states are likely over time to take the intrastate legalization road,  but that not all of them will offer overall online gambling, being content to allow just online poker or other specific forms of online gambling in isolation.
 
This inevitably impacts projections of how large in value terms the US online gambling market is likely to be.
 
He also notes that a federal solution to the legalization question is "highly unlikely" and that for the forseeable future the ball will be carried by individual states…and state-by-state legalization is by its very nature a lengthier process that stretches business return timelines.
 
Krejcik is also of the view that the take-up of online gambling by the players may not be as fast and demanding as other researchers have assumed.
 
On the positive side, Krejcik shares the opinion of many other experts that legalised online gambling will not cannibalise the bricks and mortar business, saying that on the contrary it may drive an increase in land-based gaming revenues over the long-run as casino operators are able to tap into a younger customer demographic, improve player loyalty programs, and enhance their marketing campaigns.
 
New Jersey's governor Chris Christie will perhaps find the report uncomfortable reading as it detracts substantially from his rather bullish revenue expectations for the newly legalised intrastate New Jersey online gambling market.
 
Krejcik’s projection for the Garden State is that it will generate $226 million and then only in two or three years from now, a significantly lower number than official budget predictions for the first seven months of operations, which are well over a million dollars.