Where is The Online Gambling Industry Going in 2014?

Although 2013 was a critically important year for the resurgence of online gambling in the United States (at least in the states of Delaware, Nevada, and New Jersey), we’re far from seeing comprehensive legislation permitting online and mobile gambling from sea to shining sea.

So how will this reality impact this flourishing young domestic industry next year?

On Friday, Calvin Ayre – the Canadian entrepreneur and founder of the Bodog entertainment brand – issued his predictions for the U.S. online gambling market.

“Some industry observers believe fear will grip the United States in 2014; the fear of individual states being left behind in the great online gambling race,” Ayre begins. “The situation will mimic the newly regulated markets in Europe, in which one or two dominant players emerge while the rest struggle hard just to break even. Bwin.party’s PartyPoker is reportedly off to a good start in New Jersey, but the company admits the setup costs alone amounted to between €7m and €10m in 2013. Barring an equally dominant performance by Bwin.party’s casino vertical and significant growth in the state’s overall market, turning that red ink to black will be a mean feat.”

According to Ayre, the money-losing operators will hang on in the hope that interstate compacts will remedy their situation. Plus both poker and casino will always be niche products compared to sports betting, which won’t change for years to come.

“California remains the most interesting state in play for obvious reasons,” he concludes. “For the record, I think California will get its legislative act together next year. But even when California joins the online party, it will be poker-only – at least, to start – and the state’s capacity to make a go of things on its own will provide little incentive for liquidity sharing with other states. Bottom line: it will be years yet before the US online market is anything more than a loss-leader, even for its most successful operators.”

Do you agree with what Mr. Ayre sees in the crystal ball?