| LAS VEGAS
LAS VEGAS Oct 3 Major U.S. casino operators are
racing to embrace internet gaming, even in the absence of
federal standards, as they gear up to attract younger consumers
in a market expected to reach $10 billion a year by 2017.
Some bricks and mortar casinos are teaming with online game
developers, and casino executives say they are rushing to put in
place safeguards on their own services that would combat fraud,
money laundering, underage and compulsive gambling, and players
falsifying their location.
"Online gaming is here. Our biggest challenge is converting
the 25 to 35 year old to becoming participants in our industry,"
said Brian Gamache, chief executive of slot machine maker WMS
Industries Inc at the annual Global Gaming Expo in Las
WMS expects to soon announce partnerships to provide online
game platforms to land-based casino operators to help capture
the younger market.
The U.S. Justice Department last year declared that only
online betting on sporting contests is unlawful, which experts
say will allow states to unilaterally legalize some forms of
online gambling, from lotteries to poker.
MGM has teamed with developer Playstudios, a company
founded by former Wynn Resorts executive Andrew Pascal,
to create a platform for online slots, blackjack and other
Facebook Inc recently introduced a gaming app in
Britain that permits users to play with real money there, where
online gambling is legal. Casino executives envision similar
partnerships as they race to grab market share of the nascent
"We believe we can make money on this and are embracing it
as an opportunity," said MGM chief executive Jim Murren.
"We will not be Amazoned," he added, referring to the
drastic impact online sales from companies such as Amazon.com
Inc have had on traditional firms.
Big casino operators would prefer federal standards to
regulate online gaming as they would offer a larger, uniform
market, while state-by-state legislation could lead to a
patchwork of regulations and different tax rates.
However, the prospect of federal solution dimmed this year
as Congress adjourned before it could consider a measure backed
by U.S. Senate Majority Leader Harry Reid, D-Nev., and U.S. Sen.
Jon Kyl, R-Ariz. It would now require quick action during the
post-election congressional session.
In the absence of federal regulation, several states are
expected to try to boost revenues by legalizing online poker.
Slot machine makers International Game Technology
and Bally Technologies Inc said in June they were
granted online gaming licenses in Nevada. In separate
statements, the two companies said the licenses would allow them
to partner with Nevada's casinos to provide online poker and
other interactive games through their machines.
Whether or not federal legislation passes in the next year,
a majority of officials polled in an American Gaming Association
survey released Wednesday envision the U.S. market growing to
$10 billion or more over the next several years, from about $4
billion in unauthorised gambling in 2011.
According to the American Gaming Association, about 85
countries have legalized online gambling and an estimated $35
billion is being bet worldwide online each year, including by
millions of people in the United States.
"The gambling industry has always done a great job of
reinventing itself. To grow again in the U.S., it's critical,"
Patti Hart, chief executive officer of International Game
Technology, said during a panel discussion at the Vegas
Not all casino officials are placing all their bets on the
online arena. Michael Leven, president and chief operating
officer of the Las Vegas Sands Corp, said the company is
taking a more cautious stance.
"We believe that when everyone gets into it, the cost of
acquisition will go up and profitability will go down," said
Levin. "So it's not going to be a free lunch."