Internet progress slow due to all kinds of distractions

Feb 11, 2014 3:08 AM

Here comes Internet gaming. Could this be the birth of a boom, maybe a boomlet?

It is too early to tell as the process of shaping a user friendly and profitable Internet gaming experience in the U.S. continues forward at a slower than anticipated pace.

There have been all kinds of distractions.

Nevada’s Internet action is so far limited to poker offered by subsidiaries of Caesars and Station Casinos. Some companies with approval to operate sites have been slow to submit equipment to the Gaming Control Board’s lab for the required testing that precedes any kind of trial run.

New Jersey’s Division of Gaming Enforcement is a few days away from reporting the second full month of revenues generated by Atlantic City-based websites. These numbers will get a lot of attention because they involve a full menu of casino games, not just poker.

Nevada continues its long established process of making it as difficult as possible to separate the success stories from everything else. Monthly revenue numbers are reported by casinos weeks after the fact and only by geographic sectors.

Internet poker revenue will not be reported separately from other casino action until Nevada has at least three operators. And that may be awhile as other companies take their time, waiting to see when, or even if the anticipated Internet boom is going to materialize.

No CEO wants to make a multimillion-dollar mistake. The lack of forward movement among prospective Internet operators has put a spotlight on the benefits of unifying federal Internet legislation. Recent events have underscored the fact that politicians in one state are reluctant to give another state access to their taxpayers (gamblers).

Steve Wynn’s enthusiasm for New Jersey’s approach to Internet gaming has waned for the moment. Wynn and other CEOs plot the best approach to a growing list of opportunities from the far reaches of Pacific Rim jurisdictions to domestic locales where the possibilities for Internet action continue to generate a lot of talk but very little action.

In Wynn’s case, he can change his mind in a hurry. Don’t forget he was the last of the big companies to get into the nightclub business in a big way. He now talks about its benefits like he invented the business.

The gaming industry’s changing landscape is also a factor. Will the next year or so see gaming opened up to development in the rest of New Jersey? What opportunities will major resort companies be able to exploit in neighboring New York?

The same statement applies to Japan.

And how about Florida where many millions are being spent buying the influence of lawmakers who have never gotten so much attention. A handful of major resorts in South Florida could redefine the international travel and tourism business.

Companies like Wynn Resorts tend to favor projects that get the attention of the upper end of the casino market, projects that promise big returns. That’s why the company has been saying thanks but no thanks to riverboat or other regional developments for years.

So where are resort companies going to put Internet gaming on this list of possibilities as they plan for a future where significant investments often cannot be brought to life for anything less than a billion dollars or so?Internet gaming’s development process needs time. How much time?

The answer is like predicting the direction of a stampede of cats. There are so many conflicting and complementary opinions looking for a place at the myriad legislative tables where issues are being argued.

New Jersey launched Internet gaming Nov. 26, and by the end of the year Atlantic City casinos had generated Internet revenues of better than $8 million.

It’s a number that seems a bit underwhelming to some followers of the birth process that has had to find a path around the reluctance of many banks and credit card issuers to be involved.

Nevada officials and New Jersey’s Division of Gaming Enforcement are also maintaining rigorous efforts to ensure people registering with an Internet site are actually in New Jersey. The early going has been something short of user friendly for many wannabe Internet players.

These barriers involve technology that does not always work right. The result: “a significant number” of qualified players being unable to reach the game of their choice.

On the other hand…“I think that the eight million is an impressive number for a start-up month when you consider how difficult it has been for people to get registered.”

That’s the view of a senior gaming executive who added, “These things take time. It’s all gonna come together.”

I suppose it is true overnight success stories sometimes take a while to develop.

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected].

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