Amid Downturn, Opportunities Outweigh Threats, Analyst Says

7 January 2009

When asked to summarize his outlook on the Internet gambling industry in 2009 -- in five words or less -- Simon J. Holliday, a gambling analyst, told IGamingNews: "Opportunities still outweigh the threats."

H2 Gambling Capital, a newly established data consultancy headed by Mr. Holliday, on Wednesday released a bulletin confirming what some observers have suspected for months: The industry will not be completely immune from the economic downturn.

Most exposed to the economic headwinds, H2 said, are emerging markets like Eastern Europe -- a region whose growth potential has long drawn the industry's curiosity.

"We believe that some Eastern European countries like Poland, the Czech Republic and Romania will do very well," Mr. Holliday said. "Others -- like Hungary and Ukraine -- have experienced serious economic problems, so it will be a little longer before they are ready to be tapped."

On the upside, however, H2 said that the current downturn means governments are more likely to legalize or deregulate some forms of Internet gambling to stimulate economic activity and help replenish tax coffers.

H2 expects the Internet gambling economy, including state lotteries, will achieve an 11.3 percent compound annual growth rate between 2009 and 2012.

By gross win -- stakes less prizes, but including bonuses -- the consultancy projects that, in 2008, the industry, including state lotteries, was worth $19.6 billion.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.