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The Future of Online Gaming

Author: Sylvia Garcia

There is an excellent article on Forbes regarding the future of online gambling (What e-Sports Can Tell Us About the Future of Online Gambling, 10/01/2012) that read that more 18-24 year olds watched Major League Gaming’s Spring Championship this year than the Rose Bowl and that more than twice as many of them tuned into a video game competition compared to the first round of the NBA Playoffs or the NCAA Basketball Tournament. So what does this mean? It means that the industry collectively known as “e-Sports” represents a major cultural and economic shift from the old world, physical forms of entertainment.

Still there is a significant demographic divide within gambling in the United States. Brick and mortar casinos still attract large crowds but they are mainly populated by the middle-aged crowd…about 60% of these gamblers are over the age of 50. But wager-based entertainment is growing in popularity with the younger crowd. Everyone knows that Facebook is currently ranked number one with more than 70 million “likes”, however what most people don’t know is that Texas HoldEm Poker runs a close second. And this fact doesn’t even begin to capture the impact of wager-based entertainment on the Internet.

It was estimated at the Global Gaming Expo that 2011’s Total Online Gaming Revenues were $30 billion. Of course it’s important to note that playing online poker for real money has traditionally been illegal in North America. But there are changes in the horizon. The Department of Justice, which last year opened the door to Internet gambling by reversing its opposition to it as it relates to the federal Wire Act, has paved the way for states to allow all forms of online gambling with the exception of sports wagering. Local and state governments are quickly taking action. Nevada was first to legalize online games of chance such as Poker, followed by Delaware. Others such as Iowa, New Jersey and California are seeking to authorize Internet casino games operated by companies that own physical casinos.

The federal government has stepped in to argue that chaos will ensue since the Internet cannot be contained at state borders, but the real concern is whether the government will be served its piece of the tax pie.

In 2013, the social gaming giant Zynga will launch real-money poker in countries where it is legal and they have reportedly begun lobbying efforts in Washington. No other company collects more data on social gaming behavior than Zynga and their take is that the culture of playing competitive games online is evolving at warp speed. The likely winners in the online gambling market will not only be the casino players, but also the new breed of players that embrace the full spectrum of entertainment and the social media that surrounds it.