Internet gaming in the U.S. isn’t as hot a topic as it was several years ago.
Interest has been diminished by the anemic start in New Jersey, Nevada and Delaware, and by the intervention of other topics du-jour, such as daily fantasy sports last year and e-Sports now.
But interest can be revived quickly if another state takes the online gaming plunge as almost assuredly will happen at some point. That point could come soon if Pennsylvania legislators dive in as some observers think they may.
In the meantime, online gaming is, in fact, moving forward in a quiet, uneven way.
The most visible signs of progress are in the revenue growth being experienced in New Jersey and Delaware, where both casino games and poker are permitted.
In New Jersey, online revenues jumped 35 percent to $16.232 million in September. That annualizes to $195 million and amounts to 7 percent of total gaming revenues, a significant contribution. The growth is sustained, up 32.9 percent this year, and it is accelerating.
Little Delaware has enjoyed even greater proportional growth, up 93.1 percent to $2.14 million for the first eight months of the year.
Further, the growth is happening mostly in casino games, which aren’t restricted by the need to have large numbers of players as is the case with poker, a deterrence is most states because they lack enough population to generate big player pools.
In New Jersey, casino games revenue is up 37.2 percent-year-to-date. In Delaware casino games are up a whopping 114 percent.
That kind of growth could be the motivator for other states to cash in, especially if the numbers continue to grow.
Then there is the play-for-free world. Scientific Games and London-listed GAN continue to sign casinos up to their free-play casino services, SG Universe Play4Fun and Simulated Gaming. While free play, these services position casinos to go to real-money play quickly once i-gaming is legalized.
Social gaming continues to grow. The latest Eilers & Krejcik update shows the top 15 social gaming publishers generated gross revenues of $943 million in the third quarter. That makes social gaming a substantial business.
Attention on social gaming has been attracted most recently by a consortium of investors led by China-based Giant Technologies that is offering to buy Playtika from Caesars for $4.4 billion, a hefty price for an operation whose third quarter revenues annualize at less than $1 billion.
Also on the merger and acquisition front is the proposed marriage of William Hill and Amaya into a $5 billion-plus revenue giant.
The merger isn’t purely an online play because betting shops and gaming machines are still the bulk of London-listed William Hill’s revenues, but online is surely a motivator for the deal. Amaya would provide William Hill global dominance in Internet poker and a big audience of players who can be cross-marketed to sports betting and casino games. And William Hill, of course, has the sports betting audience.
However, social gaming growth might be slowing. The third quarter grew 13.5 percent over last year for the top 15 publishers, but slipped 0.8 percent from the second quarter. Playtika, the biggest publisher, saw revenues edge down 0.4 percent in the quarter to $236.4 million, but that was still up a healthy 28.8 percent from last year.
Finally, lotteries continue to creep onto the internet, and it would not be a surprise to see most, then ultimately all, lotteries in cyberspace. Once they are on, the idea of selling games beyond lottery tickets no doubt will occur to them.
In other words, look beneath the surface and there are plenty of signs that online gaming is growing in the U.S., and it might just take one breakthrough like Pennsylvania to start a deluge.
