Profit Debate Between Live vs Online Gambling in Nevada

Posted By: Date: 05/29/2013 at 12:00 am Leave a comment

The debate among casino operators in the state of Nevada brewed for years before online gambling finally became a reality. On the one side, every casino wanted to be able to offer its services over the internet, as the online gambling industry has proven to be a multi-billion dollar business for the last decade. However, what would happen to brick-and-mortar casino revenue if the games were just as easily accessible over the world wide web? 

The question of which venue would become more profitable to casino operators, live or online gambling, and whether it was possible for brick-and-mortar casinos to be devoured by their online counterparts, was posed at last week’s 15th Annual International Conference on Gambling and Risk Taking. The conference took place at Caesars Palace in Las Vegas, Nevada, hosted by UNLV. Joshua Smith, of the Colliers International Gaming Group, moderated a panel that consisted of veteran players and industry experts alike, each sharing their opinions on the subject.

Some had very high expectations for the state’s new business, while others revealed heavy concerns that Nevada’s online gaming industry will be quickly surpassed by states like Delaware and New Jersey. Tom Breitling, CEO of Ultimate Gaming, the company that launched the very first legal real money online poker site in Nevada and the US (UltimatePoker.com), expanded on those concerns in regards to the fact that both Delaware and New Jersey chose to legalize a wide range of gambling activities over the internet, whereas Nevada currently supports online poker only.

In terms of generating the most revenue, being restricted to online poker gaming could certainly hold Nevada back. In the same token, by requiring Nevada’s residents to visit land-based casinos in order to play all other games of chance, like blackjack, roulette, craps, video poker and the ever-popular slot machines, should help to ensure that the Silver State remains a gambling mecca, attracting one of the highest tourist populations in the world.

The real problem Nevada may face wouldn’t come until much further down the road. We know that Nevada hopes to transition from an intrastate online gaming market to an interstate market once enough states legalize online gaming and open their own array of gambling sites. As internet gaming expands across the US, as is eventually inevitable, what reason would players have to visit Las Vegas when they can simply turn on their computer, mobile device or tablet and enjoy the same games without spending a portion of their bankroll on travel expenses?

Yes, Las Vegas will always be an experience in and of itself, but online gambling could certainly take a lot away from Nevada’s tourism industry as the online gaming industry continues to grow. As gambling revenue falls, so will the exorbitance of the Vegas Strip. As Mark Lipparelli, former chairman of the Nevada Gaming Control Board put it, “the question of cannibalization is a difficult one.” He explicated that today’s generation is nothing like those of yesteryear. “There’s a robust world of social gaming that’s going on, and those worlds are finally colliding,” said Lipparelli.

Every successful business model incorporates marketing trends, and Nevada’s gambling industry, both live and online, will have to follow those trends in order to stay on top. Whether that means reinventing the street of Las Vegas, increasing its online gaming business to include more than poker games, or continuing to push for nation-wide regulation, the one thing we can safely assume is that online gambling has a solid foundation in the United States. As with any solid foundation, the potential for growth is boundless.