A Profile of the Online Gambler
Las Vegas - Online gambling on sports in America
has surpassed the total handle of Las Vegas
casino-based sports books. A Congressional Report by
the US General Accounting Office stated that online
gaming reached new heights as worldwide revenues
topped $6 billion. Of that amount, over $3 billion was
wagered by US residents. Bear Stearns backed up these
findings by estimating the worldwide market would have
been in excess of $7 billion had many American credit
card providers not discontinued offering transfers to
offshore sports books. Meanwhile, the Nevada handle on
sports books was less than $2 billion. Certainly, part
of the decline in the Nevada handle can be blamed on
less Americans traveling and an overall downturn in
the economy. Perhaps an even bigger factor, however,
is the proliferation of slot machines in Nevada
casinos. Slots now represent 70% of the profits of
Nevada casinos and offer a 6% hold while sports books
have an average 3% hold. Thus, it is not surprising
that sports books are losing square footage overall in
casinos while slots are gaining in space allocated to
them.
According to Debbie Silverman of Gone Gambling (www.gonegambling.com),
an industry portal site, another big growth area for
offshore sports books is that many local bookmakers
are referring business to the offshore books for
safety. Large players are also moving to the internet
due to more attractive odds available from the
offshore books than are available in Las Vegas. In
addition, many offshore sports books attract players
with bonuses that you won't find on The Strip.
Anthony Wayne, spokesperson for licensed Curacao-based
sports book ewinner (www.ewinner.com), said that his
company offers a 15% initial deposit bonus to new
depositors. "With all of the new competitors out
there," said Wayne, "you almost have to do
something special to try to attract new players."
The Congressional Report goes on to state that one
million Americans gamble online every day. One of the
reasons for the large amount of online sports bettors
is the similarity between the typical sports gambler
and the typical heavy internet user, according to
David Lee, of Mandalay Bay casino. Lee stated that 77%
of online sports gamblers are men. They tend to be
single, 25-34 years old, college educated, and with
incomes between $40,000 and $80,000 per year.
A survey of 2900 internet users by online gaming
industry research company, The River City Group (www.rivercitygroup.com),
backs up Lee's findings. The 2001 study indicated 74%
of online gamblers are male and that they are among
the youngest, highest income, highest education group
on the internet. They are also technologically
advanced, early adopters, and heavy wireless users.
Jared Davis, president of Triumph Marketing (jared@triumphwebsolutions.com),
a marketing agency that has clients in the online
gaming industry, tends to agree with the conclusion of
the studies. "A typical customer for an online
sports book is a male 25-40 with an average income of
$70,000 per year. They are typically college educated
and avid sports fans."
Future growth of the online gaming industry will come
more rapidly on a worldwide basis than in the United
States, says the Congressional Report. Americans,
which now represent half of the online gaming
revenues, are projected to be only 24% of the $14.5
billion worldwide market anticipated in 2006. Japan is
of extreme interest to the industry because its
household internet penetration of greater than 80% is
the largest in the world and it is a country nearly as
obsessed with sports as America is.
Countries with even more long-term promise for the
industry are China and Malaysia where already two
times more people have gambled on the internet than
have purchased a product online. "Without
question, the largest areas for growth are South
America and the Far East due to increased internet
usage and cultures immersed with a long history of
gambling," added Davis. "These markets have
only a small percentage of the saturation levels of
North America and western Europe and offer operators
markets where the cost of acquisition (of new
customers) is remarkably lower."
While international markets clearly offer an
opportunity for expansion, the offshore industry can
continue to attract more new players to the industry
in all countries if it satisfies new player concerns.
According to the River City Group, the primary
concerns of potential new players include: a hassle
free experience; quick payments; easy instructions;
attractive web sites; easy registration; secure credit
card transactions; certificates from consumer
protection agencies; better odds; ability to play for
free; 24/7 customer service.
Since the first internet gaming sites began appearing
in 1995, 73 governments have approved some form of
internet gambling. The industry has grown from 900 to
1400 sites in the last two years, according to The
Internet Gambling Report. In recent months, however,
most industry analysts believe the amount of sites has
actually declined. The number of customers is not
growing at the same pace as the number of sites and
"consolidation among operators is the most
logical transgression within the industry," said
Davis.
Today, only two states, Utah and Hawaii, have no forms
of gambling permitted. Although the United States has
clearly not endorsed internet sports gaming, it is
interesting to note that more than 80% of horse racing
bets are now made away from the track at off track
betting locations and through other media like
interactive television. One other conclusion of the
Congressional Report is that most online players would
prefer to play with a "name brand" casino
rather than those virtual unknown offshore books
available on the internet. With market share at the
Las Vegas casinos continuing to decline to the
offshore sports books, casino operators can only hope
that they will soon be endorsed to operate online
again.
|
