GPWA Times Magazine - Issue 17 - September 2011

By Aaron Todd A fter analyzing the first five months of data and taking into account recent developments in the United States and Japan, H2 Gambling Capital has revised its forecast for revenues for the online gambling sector down from €25.0 bil- lion to €23.76 billion. The former number would have represented a rate of growth of 10.2 percent, while the latest projection predicts growth of just 4.4 percent, the lowest increase since H2 started tracking the industry in 1998. “Black Friday (and subsequent actions occurring in the U.S.) has decimated the scale of the Internet poker industry in that market,” the company stated in a press re- lease. “At this state we have calculated that the impact will equate to as much as €765 million of lost market value this year and a further €100 million next year.” The earthquake and subsequent tsunami in Japan are also playing a role in H2’s re- vised projections. “The [Japanese Racing Association] re- mains by far the largest interactive opera- tor in the world,” reads the press release. “Following the earthquake all aspects of their business were down and particular- ly mobile betting as people freed up the networks for emergency care.” While events in the U.S. and Japan have had a dampening effect on growth, H2 predicts that the opening of the Italian casino market this summer, along with the expected opening of markets in Spain, Greece and Belgium in 2012, will ensure that the market does indeed con- tinue to grow. H2 also believes that the prospects for a li- censing and regulatory scheme for online poker in the U.S. have improved, despite the recent crackdown by the Department of Justice. “There appears to be some buy-in across party lines to at least consider the issue more closely,” the press release reads. “However, H2 remain of the view that it will be at least three to five years before any significant regulated activity will be seen on the ground in the U.S.” WEBMASTER NEWS QUOTABLES “The current system for regulating remote gambling doesn’t work. Overseas operators get an unfair advantage over U.K.-based companies, and British consumers who gamble online may have little or no protection depending on where the operator they deal with happens to be based.” – John Penrose,Minister for Tourism and Heritage in the U.K. “This lack of activity by law enforcement led to a significant and growing perception that operating Internet poker and other Internet gambling did not violate U.S.laws, or at least that the Department of Justice thought that the case was uncertain enough that it chose not to pursue enforcement actions.” – Sen.Harry Reid and Sen.Jon Kyl, in a letter to the U.S.Department of Justice “I don’t think those things appear on someone’s website by accident. It’s a deliberate action by him to demonstrate a willingness to have a different look at poker. It’s something we always felt was going to be the case with Sen. Kyl.” – Poker Players Alliance Executive Director John Pappas on a possible change of heart from anti- gambling advocate Sen.Jon Kyl “Ultimately, it doesn’t really matter where I end up. So long as I can get myself to a country with good Internet connections, a country that allows me to earn a living again, I’m there.” – American online poker pro Isaac Haxton,on plans to move abroad “I was in shock. I guess I kind of expected it to come in the future but for it to happen so quickly and so all of a sudden.Things literally unraveled in a matter of hours. It was quite a shock because there was no warning.” – Poker pro Christian Harder on his response to Black Friday “Poker is an all- American game, and it’s a game that requires strategy and skill. Millions of Americans play poker online.” – Rep.Joe Barton (R-Texas) “I will give the board all possible support during the succession process so we can find a great, new chief executive to steer Betfair through its next phase of growth.” – Betfair CEO David Yu,who announced he will leave the company in October 2012 when his contract expires “I’ve decided to transfer the Victory Poker international player base over to CAKE Poker to manage.The brand will continue doing strategy, news, videos as an affiliate site.” – Victory Poker CEO Dan Fleyshman H2 revises online gambling revenue forecast downward Webmaster News