MRI Casino Marketing Blog
More Casinos Embrace Online Gaming and Virtual Tables

It was presumed that the online gambling industry had been left for dead after April 15^th, 2011. Dubbed “Black Friday” by the Internet poker community, this is the day the thriving industry came to a screeching halt. Feds shut down three of the biggest Internet poker sites – PokerStars, Full Tilt Poker, and Absolute Poker with arrests and charges filed against the site owners.

Fast-forward to 2014 and online casino games are making a comeback.Except this time they’re completely legal and it’s actually renowned brick-and-mortar casinos presenting them such, as the Foxwoods and MGM. 

Even brands like the aforementioned PokerStars and Full Tilt are getting back into the game having recently announced a partnership with Resorts Casino, pending regulatory approval.

How has the pendulum shifted so drastically from what seemed like the prohibition of online gambling to a full embracement?

A Legislative Full House

It all began just mere months after Black Friday in December of 2011. The U.S. Department of Justice revised its interpretation of the Federal Wire Act of 1961. The long-standing understanding of the law was it prohibited any form of wagering over telecommunications systems across state lines or national borders. But the Justice Department decided the restriction only applied to online sports betting.   

This change has given individual states the leeway to craft their own legislation permitting Internet gaming within state boundaries. Nevada and Delaware led the way. They were soon followed by New Jersey. Proposals have been introduced to legalize Internet gambling in New York, Pennsylvania, Massachusetts, California, and several other states.

It’s not just states pushing for the legalization of online gambling. Caesars Entertainment, the biggest casino operator in the country, is petitioning for the legalization of virtual casinos throughout the United States. 

Caesars believes legalizing online gaming state-by-state creates customer confusion. For instance, online gambling isn’t legal in Pennsylvania at the moment but step across the state line into New Jersey and it’s legal. 

Federal approval also opens the door to pulling players across states. One setback to restricting online gaming within state boundaries is the poll of players is too small, which means the prize poll is often too low. This is why the Governors of Nevada and Delaware recently made headlines by signing the country’s first, fully legal interstate online gaming partnership. Now that the Justice Department has confirmed that Internet transactions between states with legalized gambling are legal, an agreement such as this is possible. This particular agreement allows online poker players from Nevada and Delaware to play against each other at virtual tables to increase liquidity in the game and revenue for both states.  

Will Online Gambling Hurt or Benefit Casinos?

Some casino operators are opting to stay away from online gaming until they see what works and what doesn’t. One concern is casino owners obviously want patrons inside their establishments. So there is a worry that people playing at home will never step foot inside the casino again. There is also a concern that more online gamers will ultimately put casino workers out of work.

Case studies are painting an entirely different picture. In the state of New Jersey, where Governor Chris Christie signed the state’s iGaming bill, online gambling is being seen as a savior to struggling Atlantic City casinos. 

Once neighboring states began to legalize gambling one-by-one, dozens of Atlantic City casinos were forced into bankruptcy citing a saturated market in the northeastern United States, an extremely slow period following Hurricane Sandy, and steeply declining revenues.   

By allowing existing casino licensees in the state to offer all casino games online, it is projected thousands of casino jobs have been saved in Atlantic City and up to $150 million in annual tax revenues will be realized over the next five years. However, this may be offset by the collapse of casino operators’ already in or facing bankruptcy.

It appears there is minimal crossover between the person playing poker online from the comfort of his or her living room to the casino patron physically present for the sights, sounds, and overall casino experience. 

The one caveat is that small casino operators without the resources to develop a virtual casino have to figure out a means to make Internet technology work for them and their budget. Right now, it’s the big players in the casino industry making the most strides with online gaming. Smaller casinos have to make sure they’re not left behind.    

A New Era of Casino-Driven Online Gaming

Casinos making this move are basically going where the next generation of casino players are...online. Whereas brick-and-mortar casinos or resorts tend to target a predominantly older demographic, younger customers spend more on entertainment and they do the majority of that spending online. 

Casinos offering online gaming today are essentially filling a void left after the infamous 2011 Black Friday. Beyond offering online poker, casinos are presenting a simulated virtual casino experience with a variety of online games that include roulette, blackjack, slots, craps, baccarat, red dog, pai gow and sic bo for players to enjoy from the comfort of their own home.

It has been said that those that don’t adapt to the Internet die by it. Right now, the big player casinos are positioning themselves to stay ahead of the game. Time will tell if small casinos can do the same and not lose out to virtual casinos and online gambling.