Las Vegas is upside down. Native American casinos in the East and West are suffering. Atlantic city is a dump. What’s next for the gaming industry in the USA? Online gambling.
So far, Nevada and New Jersey are leading the charge towards legalizing some form of online gambling. If successful, these efforts would face scrutiny at the Federal level against the 2005 UIGEA (Unlawful Internet Gambling Enforcement Act) which currently bans any form of online gambling in – or directed at – the USA. The unfortunate economic climate and desperate times for America’s gaming centers is calling for innovation; and online casinos and sportsbooks might be the answer. The locality of these groundbreaking operations, however, isn’t very clear: where would “Virtual Vegas” sprout up?
Contrary to popular beliefs held by many Americans, online casinos are not actual casinos themselves, save if they have live dealers operating the games. In Costa Rica, for example, internet casinos are housed in office buildings with high powered internet connections, top of the line servers, diesel generators for power failures and satellite internet just in case land connections go down. Essentially, online casinos are really nothing different than any other internet business; the only difference being that casino games are the means of e-commerce opposed to retail sales, information depots, or other internet based services.
As a result, if online gambling became legal in the USA, the actual gambling operations themselves wouldn’t be found at the top floor of the Bellagio in Vegas or next to the Mohegan Sun hotel in Connecticut. Instead, these businesses would gravitate towards major internet hubs like Silicon Valley in California, banking centers in Chicago and New York city, or high end web hosting centers in Virginia or Texas. That means the immediate economic benefits of legalized online gambling in the USA wouldn’t necessarily benefit current brick and mortar casino centers. Instead, these internet businesses would provide “internet jobs” in the usual “internet” places.
Does this mean the upside of legalized online gambling in the USA won’t actually benefit preexisting gambling meccas like Las Vegas or Atlantic City? Not necessarily. Casino companies looking to open online gambling operations could choose to add-on to their corporate offices; or, they could save money and tap into well established internet business centers that are NOT located in Atlantic City, Foxwoods Connecticut, or just off “The Strip” in Las Vegas. The rules of efficient business practice dictate that spending more money than necessary is ultimately a waste of money; ergo, if you’re going to start a new internet venture, it’s a much safer bet to tap into existing online technology business centers opposed to trying to reinvent them at languishing land based casino destinations.
The only mitigating factor in this equation is legality. If some states do go ahead and approve online gambling operations, it’s likely the actual businesses themselves will have to be based in their respective legal jurisdictions. This would force online casino companies to pour money into hiring new employees, building IT infrastructure, and employing customer service staff in their respective state opposed to some other location in the country that might be more cost effective. It’s for this very reason that many states are pitching legalized online gambling legislation as a new source of jobs without the usual side effects of petty crime, prostitution, and traffic jams that plague brick and mortar casinos.
Don’t hold your breath if you’re waiting to invest in a legal USA online casino or for the ban created by the UIGEA to be lifted, or else you might just pass out. The most important step in this process is actually legalizing online gaming in one state, which will eventually set off a domino effect of other states following suit across the country. Until then, however, if you’re looking to help out your local casino, do so by visiting in person: we’re still far away from “Virtual Vegas” even if it seems so close to home.
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