GPWA Times - Issue 21 - May 2012

ARNOLD: Absolutely. I think when you’re looking at state agencies, when you look at the reasons why gaming is probably going to be lib- eralized in the online space, it’s already happening, it’s not regulated [and] there are taxation benefits for the states considering it and for the federal government as well. And when you’re talk- ing about a state agency that can be one of those provid- ers, there are obvious rea- sons behind that. VN: Let’s spin it forward. You’ve been putting on con- ventions for a few years, I’ve been coming to these conven- tions for a few years, and the grand question is “When are we going to see widespread adoption?” So go ahead and give us a two-, five- and 10- year outlook, and what the online gaming space might look like in those two-, five- and 10-year timeframes. ARNOLD: I think what happened in December is that clients started looking, and probably states are of the same mind. People were sit- ting back kind of waiting to see what happened with the feds, and now I think they’ve been saying because of the feds we need to race and try to get something done and that’s why you see these initiatives and legislative efforts. And they haven’t come to fruition at this point, although you probably will see a few. Our position has been that in a couple of years it will be more of an intrastate approach. But once it goes it will start to snowball and you’ll see more and more. I think the lotteries will be one of the instigators in many situ- ations. A few years out, I think you’ll see a couple of states actively engaged. In five years I would say it’ll be something that most of the states will be doing if they have gaming now. VN: What sort of environment needs to exist for federal legislation to pass, and is there a possibility that federal legislation could actually stifle the innovation hap- pening at the state level? ARNOLD: I think that’s probably a con- cern. But when you start getting into the issues, the states are trying to partner. Anything that’s going to blur over state lines, it’s going to start out intrastate. That’s what you’re seeing already on the state level in New Jersey; California, ob- viously; Iowa and Mississippi didn’t want to be, but they’re looking. And once you start, the minute there’s a state-by-state challenge, the federal government will in- herently get involved. Kimberly Arnold is the COO for The Innova- tion Group – one of the most influential consulting firms in the gaming industry. They’ve extended their expertise from the land-based gaming indus- try into online gaming and conduct exhaustive research on the U.S. Internet gambling market. The Innovation Group also helps operate the iGaming North America conferences, where online and land-based gaming executives meet to network and learn more about the American online gaming space. The Innovation Group of Companies has been associated with more than $60 billion in investment decisions specific to the gaming, entertainment, hospitality and leisure sectors throughout the past 20 years. Lotteries CASINO POKER 35 Where to now in the U.S. – and who’s driving ?