3 Reasons Online Gaming In The US Has Been More Fizzle Than Sizzle

August 11, 2015
3 Reasons Online Gaming In The US Has Been More Fizzle Than Sizzle

There was a lot of hype surrounding the return of online poker to the U.S., but thus far it has fallen well short of those lofty early expectations.

In the mainstream press, and even among the poker community, the online gaming industries in Nevada, Delaware, and New Jersey have been much maligned.

The mainstream press has called online gaming everything from underwhelming to a failure. Players have flat-out mocked the software in place on social media and forums, and have grown increasingly frustrated with technical issues.

These criticisms have some basis in fact, but there is also a problem of perception, as the reasons behind these early struggles – real and imagined – are quite varied.

Reason #1: The lede is in the lead-up

Without question, the most exciting part of the process is the lead-up to the passage of an online gambling bill. The entire period is filled with anticipation, anxiety, and the intermingling of hopefulness and cynicism.

There are bills introduced, interviews, hearings, rhetoric, and in the end (hopefully) a vote.

Who is partnering with whom? What lawmakers are for it and who’s against it? What stakeholders are involved? Will the legislature actually vote on it? Will it pass? Will the governor sign it? Can you believe what Assemblyman so-and-so just said?

There are so many moving parts that the whole process becomes utterly fascinating, with new information coming forward on an almost daily basis.

Once a bill is passed, online gambling goes from theory to reality, and the minutiae of regulated online gambling takes hold.

There is a smaller, second buildup just before the industry launches, but once a state’s online gambling sites are up and running there aren’t many surprises. The exuberance and anticipation that was present in the lead-up to the state passing an online gambling bill is pretty much gone, and as we saw in New Jersey, the focus switches to criticism.

Reason #2: It’s a new industry

Rome wasn’t built in a day. And even though online gambling has been around for 20 years, regulated online gambling is a very new industry.

For consumers, regulated online gaming sites have the same and look of the self- and loosely-regulated online poker sites they frequented during the poker boom, but when you pull back the curtain there are stark differences. It’s like looking at the guts of a computer from 1987 and a computer from 2015 – one has a lot more going on under the surface.

iGaming operators are facing a brave new world, as they have to negotiate an entirely new set of obstacles, from taxes and regulations to attracting players in smaller and more focused markets.

This is even truer for the casino corporations who are now running these online gaming sites in regulated markets. For them, the entire industry is new on every level. The level of surprise at how unique the online gaming customer turned out to be is a clear indication that they have had to learn how to adjust to this new vertical as they go.

It’s also new for the regulators in charge of overseeing things, which is why they took an ultra-conservative approach right out of the gate.

Add all these things together and you can see why the industry is still working out a lot of kinks.

Reason #3: Anti-iGaming crusaders have controlled the narrative

There is a saying, well, at least I think it’s a saying, that trust is hard to gain but easy to lose.

And for regulated online poker in the United States, all of the positives have been overshadowed by the real and imagined critiques of the anti-online gambling crowd led by Sheldon Adelson.

The larger problem is that the anti-online gambling crowd has been driving the narrative, while advocates have simply been responding to their claims. But once the message put forth by the anti-iGaming crusaders, it lingers for a very long time.

It only takes one wildly exaggerated revenue prediction to act as an albatross around the industry’s neck. No matter how ridiculous some of the early projections were, they are still being cited by numerous people and outlets as a measuring stick for New Jersey’s success/failure.

On top of the rhetoric, it will only take a single underage gambler, or a single instance of a company mistakenly emailing offers to people on the self-exclusion list, to undo a lot of the positive impacts and regulatory successes the regulated online gambling industry has had.

The point is, when things are working properly nobody talks about them, but the minute there is a single issue, it’s plastered in the headlines.

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