Online gambling is getting increasingly popular. Most people who like to gamble know of an online gambling site and the trend is showing that people are using both physical and online gambling businesses. Is online gambling effecting the land bases casinos and institutions?
The first online casino started operations in 1995 and has started a whirlwind effect ever since. Since its inception, the online business has gone through government panels, regulation, and intense scrutiny. Most states in the US ruled in favor of land-based gambling institutions but did not favor online gambling casinos. The United States has a law that says that owning an online casino or gambling related business without a license is an illegal act. The catch 22 is that there are no states currently giving online gaming licenses which are forcing online gambling companies to move to other nations.
Now back to the question of how online casinos are affecting land based casinos. The online casino business can cost only 1.5 million to operate and build, whereas a land based casino can cost up to 300 million to build. The other big difference is that it only takes about 20 people to run an online casino where it can take over 20,000 thousand employees to run and operate a land based casino. As more people turn to online avenues, it is taking jobs away from people that work at the land based casinos. This is a large economic impact especially in todays economy. Las Vegas casinos are no longer able to keep the same amount of people hired that they could 10 years ago. As a result the housing market in Las Vegas has dropped significantly as people are out of work and are forced to either sell their home or go into foreclosure.
Its obvious that when people move over to online casinos they are taking money away from the land based casino business. When the online gambling companies move out of the country, their gambling and licensing fees are dramatically decreased. This also makes it much more costly for land based casinos because of all the government regulation, fees, and oversight that all land based casinos must conform to.
While it may be much more convenient and easy to use online casinos, it is without question that these actions are having a large effect on land based casinos. Online gambling is causing land based casinos to change their marketing and business strategies to be able to compete.