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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.


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