Eye on the Industry | U.S. Studs and Duds

17 April 2009
Welcome to IGamingNews' newest series of semi-regular op-ed articles, Eye on the Industry. Here, we'll feature brief, incisive pieces -- penned by executives, analysts, lawyers, researchers, the occasional anonymous source, mainstream media journalists, fellow e-gaming scribes and a professional gambler or two -- which examine a particular issue.

Paul Lavers was our first victim. He is chief executive of SportsDirect Inc., the company behind Covers.com, a highly respected sports betting information portal. As ranked by the market research firm Hitwise, Covers regularly features among the United States' 10 most popular sports betting Web sites.

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I believe 2009 will be a pivotal year for online gambling in North America, as the economic crisis has focused everyone -- including me -- on fiscal responsibility.

Online gambling is certainly an untapped source of revenue that would aid hurting government coffers. The sector's tax-generative potential, along with the change in the U.S. administration, leads me to believe there will a more objective debate on the future of the industry.

These three individuals are the ones I believe will have the biggest impact on the Internet gambling debate his year.

Barney Frank The most outspoken advocate of online gambling in Congress, Barney Frank, has long been a promoter of personal freedoms and has tabled a number of I-gaming-related bills in previous congressional sessions.

He is expected to reintroduce his regulatory bill imminently -- I think he'll get the votes this time to bring it out of his powerful Financial Services Committee.

Mr. Frank is an experienced, respected politician who knows how to play the game. He knows the opponents of online gambling are dwindling and there is an opportunity for him make something happen. He’ll be front and center in 2009.

Thomas J. Matthews As chairman of the powerful American Gaming Association, Thomas Matthews sits at the head of a table that includes MGM Mirage, Wynn, Harrah’s and most of the casino industry.

Mr. Matthews' day job: C.E.O. of International Game Technology. His company’s stock is down 68 percent in the year to date, and over the last three years, IGT has leveraged up by adding over $2 billion in debt. He knows the challenges faced by his members -- highly leveraged companies whose income streams are being choked by the economic crisis.

Online gambling offers a valuable new business line without the capital investment they’re used to -- the perfect tonic for their financial statements. However, there is push back from the smaller members of the AGA who view online gambling as a competitive threat. If Mr. Matthews and the AGA board can bring the members in line with Vegas it will be a major boost to regulation efforts. He’ll be behind the scenes in 2009 but will play a very large role in the year’s outcome.

The National Football League Since the 1960s, the N.F.L. has opposed bets being taken on its games.

With conservative religious groups (like Focus on the Family) marginalized in the last election, it will be interesting to see whether the N.F.L., on gambling issues, stays aligned with these groups or softens its stance.

European football clubs are one example of professional sports leagues making significant revenue from sports betting. With advertising revenue falling, ticket sales impaired and the public behind online gambling, will the N.F.L. look at the activity as an opportunity to develop a new income stream?

If so, you’ll see evidence by its silence on the online gambling issue in 2009.

The IGN staff continually troll the wires, foreign papers, corporate news alert services and other dark, dusty corners of the Web to bring you the very latest industry news.