Online and Land-based Casinos – Can They Both Live and Prosper Happily Ever After?

by Todd Mullins
on January 15, 2018

There are many pros and cons that come to mind when comparing online with land-based casinos, and we will likely hear every one of them in advertising campaigns over the next few years. The truth of the matter is that certain segments of the market will always favor one of these gaming venue options over the other.

I also believe it is safe to say that – as a result of this competition – the overall casino gaming customer base will grow at a faster rate and coexistence will continue indefinitely. Any predictions beyond those, however, would be a real gamble.

The competition is real, there will be winners and there will be losers. The battlefield will include every state in the country, as well as Washington D.C.

Today, online casino gambling volume is running a distant second to the traditional, brick-and-mortar casino experience, but recent closures of numerous casinos across the country may be ominous. Wall Street’s Morgan Stanley has conservatively predicted that by 2020, online gambling in the United States will create the same amount of gaming revenue as Las Vegas and Atlantic City combined – $9.3 billion.

The issue has striking similarities to the debate between staying at home to watch major sporting events versus attending the events live. One of my fanatical fantasy football friends and longtime season ticket holder hadn’t missed a Cowboys home game in 10+ years with his three sons.

This year, he decided – with the concurrence of his sons – to forego the games and use the money previously expended on tickets, parking and concessions each week and instead purchase another large, flat screen TV each week for their media room at home. At the end of the season, the family would have a full wall of televisions enabling them to watch virtually every NFL game every week simultaneously.

And mom would no longer have to spend Sunday afternoons during football season alone.

It’s been long said that a man’s home is his castle, and today even that definition is being expanded upon. Media rooms, home theaters, game rooms, home offices, exercise rooms . . . and now your own home can also be your casino. Soon you may be able to stay in your pajamas all day.

Popular business plans today – whether for proposed start-ups or for the reorganization of a company’s or industry’s existing modus operandi – strive to minimize direct human involvement in favor of technology for greater efficiency. A perfect example of this is Uber, which refers to itself as a global transportation technology company.

Online casinos obviously enjoy substantial savings in terms of facilities, equipment and employees over their land-based counterparts, and lower expenses could result in

  • more attractive returns for investors,
  • a fresh source of potential taxation revenue for the states,
  • and/or – God forbid – greater returns to the gambling public via better odds, bonuses, etc. (The jury is still out on that one.)

An interesting component yet to be determined in this conflict will be the identity of new and surviving major owners/operators of online casinos.

While giants like Walmart and Costco jumped into online merchandising and sales in addition to their traditional brick-and-mortar operations, relative newcomer Amazon put all its eggs in one basket.

They rationalized that it’s hard to talk out of both sides of your mouth simultaneously. Their experience has obviously been rewarding and lends confidence to entrepreneurial concerns considering the emerging online casino gambling market.

Consensus among major names in the traditional casino industry is non-existent. Caesars Entertainment Corp. and MGM Resorts still appear to be evaluating whether they can successfully operate both online and traditional casinos at the same time. On the other hand, CEO Sheldon Adelson of casino conglomerate Las Vegas Sands has pledged to do everything in his power to stop the continuing rise of online wagering.

Online casinos and their supporters tout their advantages, often in tongue-in-cheek fashion, over the traditional land-based casino experience.  Poster compliments of BLOG (Back Legal Online Gambling) DOG, Dallas Texas USA

Me?

I like to root for the underdog.

And no one can deny that there are multiple benefits to be realized from the continued expansion of online casino gambling. Some may be real while others imagined.  Some may be serious while others somewhat light-hearted. Some may have less than desirable consequences and/or side effects.

Relying, however, on the propaganda put forth by each respective side is tantamount to believing what presidential candidates say during their campaigns.

Let’s look at some of the more obvious advantages of online casino gambling to players:

Convenience

Most gamblers and would-be gamblers are not within walking distance of a casino. For most, it requires an overnight or weekend trip and a host of associated expenses. And trust me, the free drinks do not cover these expenses. If the ability to gamble was your main reason for making the trip, the first time you sit down at a table you are in the hole.

Online casinos also recognize the shortening of an individual’s attention span in today’s fast-paced world. Online gambling allows the participant to start and stop as often as desired, and to jump to another game in a matter of seconds.

And the selection of games available to online gamblers is virtually unlimited when compared to traditional casinos.

The only “convenient” option available to many of those who enjoy casino-style gaming is the local unregulated – and usually illegal – game room. These typically present a less than desirable image and are often located in unsavory parts of town.

And in their effort to avoid detection by law enforcement, they are often “camouflaged,” further jeopardizing one’s safety when on the property – especially after dark.

Comfort

The traditional casino experience, as romanticized in television commercials and James Bond movies, is a public, social experience as well, filled with blinking lights, bells, buzzers, crowd reactions and distractions, etc.

That’s fine if that’s what you’re looking for.

On the other hand, online casinos afford the opportunity to legally gamble in a safe, relaxed, comfortable environment – like your home or office – whenever you want. No drunks, no smokers, no non-stop talkers sitting next to you, no dealers to tip, etc.

And perhaps the most comfortable feature of all is the absence of feeling rushed. Any player with any kind of system needs more time initially until that system becomes automatic.

Privacy

Privacy is another factor that individuals prioritize differently. Some gamblers like to see and be seen. You can sometimes catch them smiling at the hundreds of cameras throughout the casino. Others would be completely content to be invisible.

Paranoia even causes some to believe that anyone getting a little too close physically is probably with the IRS. More gamblers today fall into this second group and greatly appreciate the privacy afforded them as they sit in front of their computers at home.

The road traveled by online casino gambling supporters to-date has not been completely paved, and potholes and speedbumps still loom on the horizon.

Here are some of the hurdles ahead of them:

Federal and State Gambling Laws

To quote noted gambling author Randy Ray, “Gambling laws in the United States are probably more complicated than you think.

And that’s an understatement.

Most states employ the “dominant factor” test to determine if an activity is legal or not – if it’s skill, it’s legal; if it’s chance, it’s not.

But not all states have adopted these criteria, and the ones that have can’t agree into which category some games fall.

Some states allow what they define as “social gambling.” Others differentiate between what they call “simple gambling” and “aggravated gambling.” Both are illegal, but they are viewed differently in terms of seriousness and carry different ranges of punishment. Some states expressly prohibit internet gambling of any kind.

On the federal level, Congress and the courts are still not in agreement as to what’s legal and what isn’t. One law that remains on the books, however, is the Unlawful Internet Gambling Enforcement Act (UIGEA), which makes it illegal to facilitate financial transactions across the internet for purposes of placing wagers. For a further understanding of this law, I suggest you go to law school.

Suffice to say that anyone contemplating an entry into the online casino gambling business should heed a simple warning – Don’t leave home without your attorney.

Organized Opposition

A controversial topic like online gambling creates strange bedfellows. The ancient proverb, “The enemy of my enemy is my friend” comes to mind. Some church groups – generally opposed to all forms of gambling – have found themselves aligned with some major land-based casino owners/operators in opposition to online casinos. Their weapons of choice are typically directed advertising campaigns and intense legislative lobbying.

And deep pockets like those of Sands CEO Adelson, the 12th wealthiest individual in the country, assure the opposition the funds necessary to be heard.

Public Image

Opposition tactics on both the federal and state levels have been carefully crafted to influence the public image and mindset regarding online gambling – and not in a favorable way.

Suggestions of the involvement of sinister, unsavory individuals bring back memories of similar image problems facing traditional casinos a few decades ago.

Opponents also point to the ease that internet gaming could provide in the laundering of large sums of dirty money by cartels or organized crime, although there is no evidence to-date that this has been the case. Images such as these, whether true or not, will be difficult to overcome.

Perception, you remember, always beats reality.

Gambler Trust

The dynamic growth projections of online gambling revenues over the next 3-5 years are predicated on the confidence and trust by online gameplayers in the technology and site management of their favorite online locales. The customer service functions and their satisfactory performance in handling problems and complaints are critical elements in securing, maintaining and expanding their customer base.

Conclusion

Online and land-based casinos – can they both live and prosper in harmony?

How many rounds can David go against Goliath?

As I predicted earlier, both will still be standing at the end of this bout, but both are sure to have some new wounds and scars to attend to.

The impact of the internet on our daily lives continues to dictate the way we live, think, work and play.

And we haven’t really begun to experience the impact robotics and artificial intelligence are sure to have on our future.

Online casino gambling is here to stay, not just in the United States, but around the world.

Its landscape will continue to change as we struggle to become comfortable with technology.

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