06-30-09, 10:52 AM
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US to legalize online gambling; worth $12bn, Goldman Sachs predicts
US to legalize online gambling; worth $12bn, Goldman Sachs predicts
America will legalise online gambling to create a combined US online poker and casino market worth up to $12bn, Goldman Sachs predicts.
“We believe it is logical to assume that the US market will eventually regulate – given the potential implications for US tax take, if nothing else,” the bank said in a note to investors today.
“Based on a simple ‘grossing up’ of PartyGaming’s rake relative to its 9% market share, the US poker market alone was worth $1.5bn in 2008” the report concluded, a figure which concurs with those from gambling data specialists H2.
“Were the market to be legalized, we believe that the size of the revenue opportunity could increase materially,” it continued. “Based on an assumption of 30% penetration of offline poker players and $300 gross gaming revenue (GGR) per player, we estimate that a legal poker market could be worth $3bn.”
The report continued: “Were GGR to increase to 45% and GGR per player rise to $400, the size of the poker market alone could be worth $6bn. We also estimate that the casino market could expand to a similar scale, based on various offline penetration assumptions.”
The investment bank cautioned that progress on regulating online gambling at federal level will be slow, however, and that faster progress would be made a state level. As reported on EGRmagazine.com, debate of Congressman Barney Frank’s bill to repeal UIGEA has been delayed until September, while state-level initiatives such as those to legalise online poker in California or legal internet poker in Florida are moving more quickly.
“The momentum at state level is clearly, where widening state budget deficits are ratcheting up financial pressures, is clearly building,” the report concluded. “Indeed, if California and Florida move forward with legislation to legalise online poker, this could prove the catalyst for other states to follow suit”.
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