A Glance at 2005

7 January 2005
See Also:

A Look Back at 2004

The Best and Worst of 2003

Top Stories of 2004

The First Amendment - Finally the online gambling industry has responded to the U.S. Justice Department's crackdown on advertising for Internet gambling services by seeking a declaratory judgment from a federal court. Casino City's case against the government will be a major story throughout 2005 and perhaps beyond. The industry looks on to see whether the government has a right to tell media outlets that they cannot accept online gambling ads. A victory for I-gaming doesn't necessarily assure that publications and broadcasters will fall over each other for the I-gaming advertising dollar, but it is apparent that the freeze will continue at least until there is a verdict.

Prohibition 2005 - The American prohibitionists took a beating again in 2004, and this time it was Jon Kyl's turn in the Senate. With the new year comes the 109th Congress, which means the House Bill passed in '03 is dead. Rep. Oxley on the House side has shown that he's determined to pass a funding prohibition and will surely be pushing to get the ball rolling. Kyl again faces an uphill battle, only this year the bill won't be opposed (as it's been in the past) by Senate Minority Leader Tom Daschle, who lost his seat in November. Whether that’s enough to sway the Senate in Kyl's favor remains to be seen. The states rights issue will most likely be a major point of debate in both chambers, and it's doubtful that any bill without exemptions will stand a chance. The industry has avoided prohibition for nine consecutive years, and the battle is sure to be fierce again in '05.

Australian Policy - The federal government decided last year that no changes to the 2001 Interactive Gambling Act were necessary, essentially leaving the decision of whether to license betting exchanges in the hands of the states. This promises to be a major ongoing--and at times very ugly--conflict throughout the year. The revenue potential for exchanges is huge, and having the likes of Kerry Packer on board makes the exchange betting an even more compelling option for the states--particularly those in need of money. It is believed that if one state opens the door, the rest will follow. But the racing industry, if it remains united, will continue to have great lobbying power, and their will to keep exchanges out of Australia is strong. Corruption of sport, taxation issues and problem gambling will all come into play.

More of the Same in Europe? - It's doubtful that the issue of cross-border gambling will be resolved in 2005. The monopolistic system for gambling businesses in most European states is inconsistent with the modern economic philosophy shared by the European community. In the absence of an assertive E.U. policy, look for the legal battles to continue. The United Kingdom, meanwhile, is tasked with moving its Gambling Bill, and it has become apparent that it won't be as easy as it was originally thought to be.

The Big Brands - What a difference a year makes. Major gaming and entertainment brands, such as MGM, Kerzner and PBL, got out of the I-gaming space in '03, which was looked about as a step backward for the industry as a whole. But that trend was reversed in '04, as Virgin, World Poker Tour and others either entered or reentered the business. Even PBL has gotten its foot back in the door through a partnership with Betfair. And there's serious speculation that Harrah's wants to launch a World Series of Poker Web site. The pattern of major brands entering the I-gaming space is likely to continue in 2005.

The Next Big Thing - On the heels of the poker boom, what will be the next big moneymaker for the online gambling industry? Will bingo finally break through? Will new U.K policy be a shot in the arm? Will in-game betting create a new breed of sports bettors? Will persistence pay off with a resurgence in the P2P space? Will mobile betting reach its potential?

Additional Developments to Watch:

  • Further growth (including the arrival of more major entertainment brands) in the poker sector.
  • The United States' appeal of the WTO ruling in favor of Antigua.
  • More jurisdictions entering the I-gaming space, including South American countries, U.S. states (racing) and Canadian provinces (lotteries).
  • Ladbrokes' rumored interest in acquiring Sportingbet.
  • Lotteries getting more aggressive with their Internet/interactive plans.
  • Nevada's ongoing interest in intrastate online gambling.
  • Efforts to launch in-flight gambling services.

And finally, some predictions for the coming year:

  • Tech-savvy law enforcement in Denmark figures out how to effectively prevent persons located in Denmark from accessing foreign online gambling sites. Their efforts are heralded by most, but the initiative delivers a major blow to the country's burgeoning Internet fraud industry. Fraudsters are ultimately forced offshore.

  • An errant kick of the famous "Beckham ball" at a Golden Palace fundraising event knocks the placard next to the Virgin Mary cheese sandwich off of the sandwich's display table. Without proper signage, a guest mistakes the table for a buffet and gobbles the sandwich. He becomes violently ill and, with no waste receptacle in sight, leans into the window of the replica display of the Golden Palace-sponsored rocket ship and vomits on the space-bound George W. Bush doll purchased by GP and placed in the ship's cockpit. Not only does the vomit bear the image of the Virgin (as the sandwich did) the act is seen as a symbol of revenge against the Bush family (for George Sr.'s puking on the Japanese prime minister in '92) and sold on eBay for twice the price of the original sandwich. The purchase is cancelled by eBay's payment processor, PayPal, because Golden Palace is categorized as an online gambling merchant. Meanwhile the debacle negates an offer on the table from Virgin Group to purchase the sandwich and make it the official mascot for the VirginGames.com Web site (although it is also rumored that it was to offered to a contestant on Sir Richard Branson's "Rebel Billionaire" TV show, who face the challenge of eating the 10-year old sandwich while balancing on a wire 10 feet above a pit of venomous snakes).

  • Deep Blue, the famous IBM chess-playing supercomputer, folds up the chess board for a run at the World Series of Poker. It wins the tournament handily but is disqualified when it's discovered that it wore a PartyPoker.com sticker at the final table. The fallen champion joins the Celebrity Poker tour, where it meets actor/poker player Ben Affleck. The two fall in love and marry, but the matrimony is nullified by a new law banning human machine/marriages. Deep Blue later tries to take up the online game, but can't find any good games because most online poker rooms don't allow poker bots to play.

  • A National Basketball Association franchise will bid to purchase an online casino, but the offer will be rejected on the grounds that having a relationship with the league would damage the I-gaming industry's image.

  • Australia's TABs will set up a task force to recommend and lobby for the prohibition of betting exchanges at both the state and federal levels. The panel will submit a report to policymakers calling for the following legislative measures:

    • a ban on all people with foreign sounding names at Australian racetracks;
    • the abolishment of all exchanges, including stock exchanges and currency exchanges;
    • the suspension of all flights, telephone calls and mail originating in the United Kingdom;
    • a ban on Australian money at racetracks unless the treasury agrees to removed the Queen's image from all currency;
    • the issuance of licenses to kill any or all personnel associated with betting exchanges;
    • instant and irrevocable deportation of any Australian who mutters the word "Betfair";
    • $500 million in funding for a responsible gambling campaign identifying betting exchanges as the route of poverty, terrorism, disease and the great tsunami of 2004; and
    • an exemption allowing TABs to operate betting exchanges.

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.