Does Online Gambling Need A Trade Organization?

October 16, 2015
Does Online Gambling Need A Trade Organization?

One of the ideas kicked around during a panel discussion at Global Gaming Expo (G2E) 2015 was the possible creation of a trade organization for the online gaming industry. The idea was tossed out by Bill Pascrell III during a talk about the lessons learned in regulated U.S. iGaming markets, with Pascrell teasing a potential “major” announcement on this front in the coming weeks.

This is certainly not the first time this topic has been brought up, yet up to this point an online gaming trade organization has never made it past the talking phase, so Pascrell’s intimation was basically taken with a grain of salt.

The trade organization may never come to fruition, but it raises the question: Does the online gaming industry need a trade organization?

What about the AGA?

In an ideal world, the online gaming industry wouldn’t need to form a trade organization because they already have one, the American Gaming Association (AGA). Unfortunately, the AGA has spurned the online gaming sector in recent years due to a rift between its heavyweight members over online gambling, so our ideal world is out the window at the moment. It should be noted there are recent signs that the AGA is softening on this issue.

The AGA’s evasive approach to online gambling has created a vacuum and set the stage for confusion. Anti-online gambling interests have created one narrative, while pro-online gambling advocates try to refute this negative messaging and at the same time push several different strains of a pro-iGaming message tailored to their own self-interests. Because of this push/pull environment, where one side is going in several different directions, there is a clear messaging void and a lack of factual debate when it comes to online gambling.

Consider for a moment that despite tons of evidence to the contrary, there are still gaming interests and lawmakers who fear online gambling will cannibalize their brick & mortar casino. And despite several years of operating virtually incident free (with a much better track record than the brick & mortar gaming industry) people still fear geolocation and player verification technology will fail — even though this is the same technology banks and other financial institutions rely on.

Still need more evidence that a lack of messaging is a major issue? How about the fact that despite no evidence that online gambling increases problem gambling rates, and despite problem gambling groups explaining how online gambling can increase funding and identification, one of the main arguments against iGaming expansion is it will create more problem gamblers.

This lack of clarity and confusion has no doubt been a major factor in the stalled progress, contributed to the lack of consumer awareness, and bred a tentative view of the legal iGaming industry among lawmakers and financial institutions.

Still, without a trade organization the online gaming industry has made modest gains in the United States. Nevada, Delaware, and New Jersey have legalized online gaming, and Minnesota, Georgia, Illinois, Michigan have legalized online lottery sales. There are also serious efforts afoot in Pennsylvania (iGaming), California (iPoker), and Kentucky (iLottery), as well as rumblings in a number of other states from Massachusetts and New York to Mississippi and Florida.

However, it should be noted that the bills signed into law in Nevada, Delaware and New Jersey all occurred when the AGA’s official position was in favor of legalizing and regulating online gambling.

What would a trade organization do?

The main purpose of an iGaming trade organization would be to create a cohesive, coherent message. By unifying the pro-online gaming interests around several agreed-upon positions, they could streamline their message and better focus their lobbying dollars.

This singular message would be of great benefit. In addition to quickly refuting claims by the anti-online gambling powers that be, they would also keep their squabbles behind closed doors and focus on their points of agreement — and these are the simple, top-level issues.

Lingering questions

If a trade organization does materialize, it doesn’t necessarily mean it will be effective. How effective it is will largely depend on the following:

  1. Who will be involved in its creation?
  2. Who will fund it?
  3. What issues will they focus on?
  4. What happens to the fledgling group if the AGA changes its position… again?

Could online gambling use a trade organization? It certainly wouldn’t hurt. Do they need one? That’s a bit more up in the air.

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