The Sky's the Limit

NY Times Reports Tech Industry Bullish on U.S. Online Gambling

The Sky's the Limit for U.S. Online Gambling, Think SomeState-level legal machinations concerning online gambling have captured the attention of tech companies hoping to tap into a burgeoning American market. So reports David Streitfeld, technology writer for The New York Times, who characterizes Silicon Valley’s interest in online gambling as currently focused overseas but having become increasingly piqued by potential U.S. growth thanks to recent legislative developments.

Last week, John Mehaffey provided an overview of the current status of legislation affecting the prospects for online poker in the U.S. With Nevada and Delaware already having passed laws to permit various types of intrastate online gambling (and NV also currently exploring interstate possibilities), six other states have online-gambling bills at various stages in the legislative process. Of the latter, the New Jersey bill which Governor Chris Christie conditionally vetoed earlier this month is the farthest along, with the state legislature soon expected to approve Christie’s proposed changes and present the bill for his signature once again.

In “Tech Industry Sets Its Sights on Gambling,” Streitfeld acknowledges the difficulty (and slowness) of the legislative process, but notes how tech companies aren’t dissuaded by the fact that it will take months or even years before the U.S. market opens up to online gambling, with the potential riches due to those able to position themselves effectively providing ample motivation to remain patient.

“Companies here believe that online gambling will soon become as simple as buying an e-book or streaming a movie,” says Streitfeld. He spoke with Chris Griffin, CEO of online gambling start-up Betable, who after having successfully obtained licenses in the U.K. has now set up offices in San Francisco in anticipation of doing something similar in the U.S.

Much as he did with Forbes in November 2012 when he spoke with Eric Savitz at a technology conference in Tucson, Griffin voiced optimism to Streitfeld regarding the future prospects for developers hoping to tap into a U.S.-based online gambling market. Griffin characterizes legislative changes in the U.S. as having paved the way for “the next evolution in games” and providing “a kind of ground zero for the developer community.”

A significant element of such future forecasts involves the transitioning of currently popular free-play online games into games that involve real-money wagering. A frequently cited example in articles such as Streitfeld’s is the Facebook-based social network game Farmville, with the possibility of players betting real money on their virtual crop-raising abilities being entertained as one avenue by which its creator — Zynga — might benefit from turning play-for-fun games into gambling games.

Thus did Streitfeld also speak with Zynga CEO Mark Pincus about his company’s move toward “making gambling a centerpiece its new strategy.” Dave Behr reported here recently about Zynga’s current financial woes (including a precipitous drop in revenue in the last quarter of 2012), and the uncertainty of its future prospects in online gambling sans a mobile version of its games.

Streitfeld goes on to contrast commercially successful efforts in other countries to introduce real-money online gambling games with the politically-vexed, slow-moving situation in the U.S., noting along the way how opposition from land-based Vegas and Indian casinos has additionally decelerated the legislative process in America.

Interestingly — and perhaps predictably — nearly all of the 47 comments to Streitfeld’s piece are negative toward the prospect of online gambling becoming more widely available in the U.S.  (While perusing comments sections for articles posted online often proves less than enlightening, NYT‘s policy of both vetting readers’ comments and limiting the window for response to the 24 hours after an article’s posting helps create a context for relatively constructive discussion.)

Even though Streitfeld avoids overt editorializing in his reporting, the fact that all of his sources (industry insiders hopeful to benefit from the opening of the U.S. market) are positive about such a future perhaps causes the piece to appear to adopt a pro-online gambling stance.

Meanwhile, those commenting on the piece are almost unanimous in their opposition to such, characterizing gambling as a “societal ill,” “a rotten, brainless activity,” and “for suckers,” with most reiterating in different ways a view that “gambling online is illegal for good reason.”

Such is the highly fraught context into which the new future of online gambling (including online poker) in the U.S. is emerging. Not too great of a surprise, really, as the subject of gambling has always been a divisive issue in the U.S., paradoxically revered and reviled throughout the country’s history. Thus while the popularity on online gambling in America seems a likely bet, so, too, will be the popularity of condemning its growth.

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