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Oil prices to boost online gambling, casinos in trouble

Oil prices to boost online gambling, casinos in trouble Well, folks, the oil hit yet another record today, climbing over $133 per barrel and according to many analysts there is no relief in sight. Naturally the high oil prices will affect not only the gasoline price at the pump, but the price of almost all goods in the country. But experts point out the fact that there is a short list of companies who stand to benefit from the rising oil prices, namely internet-based services, such as NetFlix, videoconferencing providers and in general any company which allows people to relax closer to home. Of course the financial experts in the U.S. would not discuss online gambling, unless stocks of Internet gambling firms are traded on the local markets, but it's a fact that online gambling is right there along the companies expecting to benefit from the soaring oil and gas prices. Respectively, the land-based casinos stand in front of a brick wall. Thanks to the gambling laws in the U.S. which mandate that gambling should be turned into a vacation or at least a road trip, many players would skip the long drive to the nearest casino (or Las Vegas) and turn to their computers to play slot machines or blackjack.

 Online casinos such as Golden Casino and River Belle are turning up the heat on their offline competitors with attractive money bonuses and free play. Yes, the gas savings are there, but would you prefer a discounted hotel room (likely facing the hotel's garage and still at $50 a night) or would you go with $555 bonus on your first deposit (Golden Casino)? Most of the land-based casinos are yet to find an adequate response to a marketing campaign of this magnitude. When driving/flying to Las Vegas was cheap, the free food and shows were good enough for the consumers to combine the entertainment of gambling with the entertainment of vacationing, but now, not so much. The rising prices reflect the cost of operation for the casinos, as well, which would drive profits down and even facing gambling companies with red balance sheets. Meanwhile the online casinos don't have to deal with increasing prices of anything. Most of their employees and offices are based in small and poor countries, where highly educated people will work hard for pennies on the dollar, compared with the U.S. labor market. The online gambling companies don't have to pay more for basic casino hotel operations such as cleaning services, food, wear and tear, etc. as their main operation is located on inexpensive computer servers.

 So on one side we have the online gambling company, which requires no more than 100 employees and 10 servers. Located in countries where $100 will get you a long way, the expense of salaries and energy are minimal. But on the other side you have the land-based casinos, requiring thousands of employees and hundreds of different services and products - from the little soap in your hotel room bathroom to the chef preparing the Crème brûlée downstairs, all this while necessary for their customers to travel, often long distances, and to pay the tourist-town prices outside of the casinos...There is no doubt who the winner in this situation is. Don't be surprised if the U.S. gambling companies turn around and start lobbying for regulated online gambling in the United States.

 Published on 05/21/2008

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