$ £

Are Indian fears on Internet gambling and poker justified?

The growing involvement of US Indian tribal gaming interests in debates on whether individual states should legalise online poker or not is addressed in an interesting article written by noted columnist Dave Palermo.

Titled "Internet gambling: Threat or opportunity?" the well balanced article can be found at Indian Country Today.

"The likelihood Internet poker will soon be legal in the United States is igniting a fear among some tribal leaders that online gambling will impact revenue from tribal government casinos. Internet gambling proponents contend the fears are unwarranted as online gamblers represent a segment of the public that is not patronising casinos....."

Interesting statistics from the piece:

  • California tribes generate $7.3 billion a year in casino revenue, the largest share of the $26.8 billion won in 2008 by 442 government casinos operated by 237 American Indian tribes and Alaska Native villages in 28 states.
  • Harrah's Entertainment, the country's largest casino company, has spent more than $3 million promoting Internet gambling, hoping to capture some of the $5.9 billion wagered each year on 'illegal' Web sites by online poker players and sports bettors.
  • On average, 80% of casino revenue comes from slot machines with another 15% generated by table games such as blackjack and mini-baccarat. Poker, a player-banked game, normally generates less than 5% of a casino's revenue.
  • "The profile of the U.S. online player is a skilled poker player," said Lewis and Roca attorney Anthony Cabot, an authority and author on Internet gambling. "He doesn't go to casinos."
  • "The person on the Internet is certainly a different profile of gambler than the individual going to the casino," said Las Vegas attorney Toni Cowan, who previously worked for the National Indian Gaming Commission, the federal regulatory agency for tribal government casinos.
  • International online poker and sports wagering, according to the most prominent survey is a $21 billion industry, about $5.9 billion of which comes from U.S. gamblers.
  • PricewaterhouseCoopers estimates online wagering nationwide would generate $10.1 billion to $41.85 billion in federal taxes and fees over a 10-year period. BolaVerde Media Group, an Internet gambling consultant which analysed PWC figures for Congress, said the lower figure is more realistic.
  • California poker players bet $300 million a year on the approximately 2,355 wagering Web sites, many of which are in the Caribbean and Central America. Sacramento gambling attorney Martin Owens believes 1.4 billion Californians are wagering on the Internet.
  • Americans in 2007 lost $92.3 billion gambling at tribal and commercial casinos, racetracks, card clubs and lotteries, according to Christiansen Capital Advisors Gross Annual Wager. Of that amount, $60.4 billion was won by tribal and commercial casinos.
  • After a decade of robust growth, casinos operated by Indian tribes and Alaska Native villages won $26.8 billion in 2008, a meager 1.5% jump over 2007, according to the National Indian Gaming Commission and Alan Meister's 2009 - 2010 Indian Gaming Industry Report. Revenues for 2009 are expected to drop for the first time since passage of the Indian Gaming Regulatory Act of 1988.
  • California has in a decade evolved into a maturing market showing early signs of saturation. Revenues in 2008 fell 6%, from $7.8 million to $7.3 million. With the slowing market demand a handful of tribes that negotiated the right to increase their complement of machines from 2,000 to 5,000 have yet to install the devices.
  • Some California tribes believe intrastate poker would violate the tribal exclusivity on casino gambling written into tribal-state agreements, or compacts. Those agreements guarantee the state a "revenue share" of casino profits amounting to $365 million a year, far more than the $30 million to $50 million a year that the most optimistic supporters contend will be generated with online poker.
  • Cyberspace is regarded as the inevitable wave of the future, which many believe should be embraced by tribal governments.

Source: InfoPowa News

Share this