Where would “Virtual Vegas” be in the USA?

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?

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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.

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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.

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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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Black Friday the “Hindenburg” moment for USA online gambling?

Last month’s arrest of several major poker website executives – effectively shutting down the likes of Pokerstars.com, Fulltiltpoker.com, and AbsolutePoker.com – may have produced irreparable harm to the USA facing online gambling industry. In the wake of this event, many top brands have left the USA market altogether, preferring a skin and bones operation powered by what little European business they can garner, opposed to risking a quarrel with the USA Department of Justice. Back room deal making? Perhaps, but all the same, things have changed for good and there’s no looking back.

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Among the most noteworthy “former” USA operations were Sportsbook.com and BetUs.com. These two juggernauts have done millions of dollars in business with USA customers over the years; and now have decided to bow out of the market to avoid further scrutiny. Sports betting is hugely popular with Americans but also equally unpopular with USA authorities. The watershed moment for USA online sportsbooks was the arrest and prosecution of BetonSports.com executives, which served as a shot across the bow of all USA online sportsbooks that the DOJ meant business. Sportsbook.com and BetUs.com will continue to service players that already had accounts prior to the cut-off date, but anyone from the USA that tries to join these sites moving forward will be blocked.

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This move is a bit puzzling to many industry arm-chair experts: will severing ties with the USA market NOW really prevent the Feds from prosecuting these companies, too? After all, the supposed case against the poker company giants had been years in the making. For all anyone knows, the DOJ could already have indictments lined up for BetUs.com and Sportsbook.com. The exit of these two behemoths from the US has produced a marked vacuum effect leaving companies like Bodog.com, BetOnline.com, and JustBet.com left behind to scavenge for new customers. By all accounts, their scavenging has been fruitful: on Kentucky Derby day alone what were once considered second-string USA sportsbooks suddenly became huge marketing forces with the acquisition of thousands of new players.

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The casino side of online gambling has remained the status quo, save the exodus of Rival Gaming powered outfits from the USA market. All Rival Gaming brands and white labels will no longer process payments for any US player, regardless of when they became customers. This decision has produced a small – yet very noticeable – shift in customer acquisition. USA Customers have been scrambling towards many Real Time Gaming casinos who are now raking in the cash with newfound clients.

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So, given all this turmoil, will the upcoming IGN conference in Dublin, Ireland, turn into an Irish wake for the online gambling industry? Despite these shocking developments, many feel the show will go on. Ultimately, success in the USA market at present time boils down to the quality and feasibility of payment processing. While USA sportsbooks have now begun charging affiliates with higher processing fees, most USA facing online casinos continue to push forward hoping to fly under the radar until the coast is clear.

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For its part, Jaxcasinos.com has fully updated its website to include which online casinos still accept USA business and which do not. Look to the menu on the right-hand side of this page for a complete listing of major online casinos and which nationalities they service.

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Good Luck and keep your ear to the rail for new developments!