A Future for
Land Based or Online Casinos?
In the UK, there seems to be no end to the popularity of online
casinos. The online gaming companies spend millions on offline
and online advertising, and they have full confidence in the
fact that players will keep on coming. Question is, is this the
right assumption? More and more gambling experts are changing
their mind and are losing faith in the online casinos. They
believe that eventually, the craze of online casinos will pass,
and the real winners will be the land-based casinos.
The UK is one of the most interesting countries, when it comes
to gambling. Online casinos pop up everywhere, while the
Gambling Deregulation Bill passed by the government, in the
beginning of 2005. Street bookies are having a hard time, being
unable to compete with the high betting exchanges of online
casinos.
Investors threw themselves on the shares of online casinos on
the London stock market in 2005. Last year was an exciting year
for the stocks of online casinos, but after going up and down,
the stock prices went up again and the investors and gambling
experts seem to have renewed their confidence in the online
casinos, mainly thanks to the poker craze that seemed to have
taken over the world.
The problem is that a 50% plus operating margins gained by the
biggest online casinos is untenable, even though the current
share prices believe that these margins will stay the same
forever. Unfortunately, history taught us that skyrocketing
profits will eventually wear out, and the situation of the
online casinos is no different. The signs of erosion of the
margins are already visible in the high welcome bonuses, comp
points, rake back and numerous promotions offered to the
players.
The competition in the online gaming industry is killing. It's
really easy to enter the online casinos industry, financially
speaking. It's possible to buy an operating poker site for only
£30,000 and since online casinos share players through the
software providers, liquidity is not a real problem.
Gambling experts believe that the players will eventually stop
choosing an online casino for its brand name, since they are
realizing more and more that there is no difference whatsoever
between the famous and the un-known online casinos, since they
all operate from the same off shore locations and use the same
contacts.
Interesting is, that the land based casinos are not really
suffering from the online casinos buzz, despite the success of
the online gambling sites. In fact, since the gambling rules
changed in October last year, more and more people have been
visiting the brick and mortar casinos in the UK. It's becoming
more and more common to just pop in a casino. The land-based
casino industry in the UK is increasingly successful, thanks to
the 17 new and bigger casinos that are being built and to the
fact that after these casinos there will be no more casinos,
which means less competition and more money per casino.