GPWA Times Magazine - Issue 13 - June 2010

By Murray Marshall, Kahnawake Gaming Commission I t is, of course, impossible to predict with any accu- racy what the future of Internet gaming may be —particularly if the fore- cast extends beyond the next twoyears.Thenatureof the industry issuch that it changesquicklyandhas the capacity to morph in unexpected direc- tions; for example, the explosion of peer- to-peer (poker)gaming in theearly2000s hadaprofoundeffect on the industry. That said, there are certain identifiable factors that will influence the industry in the foreseeable future. Technology Obviously, the online gaming industry wouldnot existwithout the 20th-century technological phenomenon of the Internet. Technological advances have been, and will continue to be, a major influence on the growth and direction of the industry. As previously mentioned, the advent of peer-to-peer technologies made possible the rapid growth of online poker, which in the early 2000s single-handedly took the industry to a whole new level. Recall that shortlyafter its initial publicoffering in2005, PartyGamingwas valued at over $12billion! A necessary complement to peer- to-peer technologies was increased bandwidth requirements. Advances in broadband Internet access — both in terms of bandwidth and accessibility to the consumer — have impacted and will continue to impact the industry. Increased bandwidth enables all gaming operators to offer better graphics, sound effects and overall functionality for their games. It allows games to be played using interactive formats, eliminating or reducing the need for time-consuming software downloads. Broadband has also made possible new, bandwidth-intensive forms of gaming such as video streaming “live dealers,” which is particularly important for theAsianmarket. In the Internet world of shrinking attention spans, speed isking. In terms of accessibility to the con- sumer, eMarketer opined in its 2006 U.K. OnlineReport that “there also is a strong correlation between broadband and online gambling, so as broadband penetration grows the market for on- line gambling will continue to grow.” The increased popularity of online gaming in Europe and Asia in the past few years is driven, at least in part, by increased accessibility to broadband connectivity. It is safe topredict that as access to high-speed connectivity con- tinues to grow, sowill the popularity of Internet gaming. In the past two or three years, gaming through the use of wireless devices — particularlymobilephones—hasbecome a fast-growing segment of the industry. Smart phones with larger screens and better graphics combined with more efficient download capabilities andmore affordabledataplanshaveall contributed to the rise of the mobile phone as a platform of interest to many gaming operators andplayers. The 5th Annual Mobile GamingMeeting held in London in November 2008 concluded that it was very possible to improve gaming revenues earned from the games of blackjack, poker, roulette and other casino games with the help of mobiledeviceswithina calendar year. The jurisdictions with service providers that canbest fulfill the industry’s techno- logical needs — bandwidth, latency, reli- TheFutureof InternetGaming: SomeFactorstoConsider “Increased bandwidth . . . allowsgames to beplayedusing interactive formats –eliminating or reducing the need for time- consuming software downloads.” 33 Gazing into the Crystal Ball