LAS VEGAS ONLINE GAMING
By Chet Yarbrough
VERSION OF THIS ARTICLE PRINTED IN “LAS VEGAS REVIEW JOURNAL”
Bally Technologies has been at the forefront of casino gaming since its beginning in 1932. Bally Technologies offers a wide range of technology and entertainment solutions to casinos around the globe. Services to the casino industry by Bally Technologies include gaming machines, mobile applications, iGaming platforms, casino-management systems, and player-marketing solutions. More importantly, they are at the forefront of online gambling as it gains approval in the United States. Bally Technologies is headquartered here, in Las Vegas, Nevada.
John Connelly, Vice President of Business Development, said, “Bally Technologies is an international organization with offices around the world; we have offices in Amsterdam, Rome, and London, to name a few”. Bally Technologies has more than 1,000 employees in Nevada.
In February of this year, Nevada became the first State to approve online gambling. Connelly said, “In the last two years, because of pending national approval of online gambling, Bally Technologies has increased Las Vegas employment by more than 200 people.” Connelly explained, “Additional state regulatory approvals of online gambling and improving mobile applications will increase the size of our online gaming division, which we call Bally Interactive.” He said, “Two hundred hires may increase to 1500, depending on market growth.”
Connelly said, “Bally Technologies offers economies of scale to both large and small customers that are processing the complex activities of the gaming industry.” Connelly explained, “We have been serving the casino industry for more than eight decades.” With Bally Technologies early entry and experience in electronic gaming, the advent of the internet became a superhighway for expansion of the company’s business.
Connelly noted, “Job searches for Bally Technologies are often worldwide because of highly specialized needs of the company”. But, Connelly said, “We also hire employees straight from college and have on-the-job training and continuing education programs to meet present and future needs of the company.” He said, “Bally Technologies extends services to casinos and online gaming companies around the world.” Bally Technologies provides back-office services to 90 percent of Atlantic City casinos. They offer contract services to mega-casinos like Mohegan Sun and Foxwoods Resort Casino in Connecticut.
Taking a peek at Bally Technologies’ website (http://ballytech.com/careers/) there are career openings for customer service, information technology, human resources, software development, project management, and engineering.
When asked about the effect of online gambling on casino table games, Connelly said, “Online gambling is another way of reaching the customer and its growth will complement the Casino customer base.” He added, “Online poker will educate customers about the joy of the game.”
American Casino & Entertainment Properties (ACEP) is a locally based company that owns the Stratosphere and Arizona Charlie’s casinos in Las Vegas. They also own and operate the Aquarius Casino Resort (formerly the Flamingo) in Laughlin, Nevada.
Alec Driscoll is the Director of Gaming Development for ACEP. Driscoll explained, “ACEP has been gearing up for a rollout of online gambling for the last two years.” He said, “ACEP researched the market, particularly in Europe where online gambling is legal, to prepare for a launch of our own online gambling website in the United States, www.acePLAY.com.”
AcePLAYpoker.com rolled out in February of this year. “It is presently a no-money website but pending regulatory approval, we plan to become a pay-for-play online gambling site,” Driscoll said.
Driscoll explained, “The website launch is a great promotional tool for their brick and mortar casinos.” One can access acePLAYpoker.com directly or through ACEP’s casino website addresses. The launch offers an educational experience for players wanting to know more about casino entertainment and gambling. Driscoll said, “Right now, our focus is on Nevada, but we have plans to expand our online poker site as more States approve online gambling.”
Driscoll explained, “Online gambling has been around for a long time but is, just now, beginning to be legalized in the United States.” Prior to legalization in Nevada, online gaming was a “gray market” because its base of operations was outside the United States.
Driscoll said, “ACEP’s entry to online gaming has required a great deal of research, re-education of employees, and hiring of new employees to serve what is expected to be a significant marketing opportunity.” When asked about the steps in the process of opening an online site, Driscoll said, “We talked to operators and employees in other countries and contacted local companies like Bally Technologies to see what they could offer that fit ACEP’s corporate objectives.”
ACEP chose to create a separate company that would offer online gaming, initially as a marketing tool for their brick and mortar casinos. The longer term objective is to become a licensed gambling website. Driscoll said, “ACEP decided to use Bally Technologies’ gaming-platform to initiate ACEP’s entry into the online market.” Driscoll explained, “No date-certain has been set for launching their real-money online gambling site but it is a high priority for the company.” He added, “In the meantime, acePLAYpoker.com has been a great marketing tool.”
Current job openings for ACEP’s online gaming and properties can be found at www.ACEPcareers.com.
Online gaming dates back to 1969. The success of online gaming is partly limited by technology and significantly influenced by government regulation.
The upper limits of technology have been pushed higher with programming platforms that connect people to play games. Beginning with William Higinbotham in 1958 with “Tennis for Two”, gaming on a monitor (actually an oscilloscope screen) became a local opportunity. By 1980, local game-player’ opportunities morphed into international game-player’ connections; video games became valuable copywriter-secured assets; e.g. Atari’s “Asteroids” and “Lunar Lander”.
With the advent of ARPANET, linking the University of California to the Stanford Research Institute in 1969, the potential for gaming became national. In 1973, with the creation of a common computer language, local networks combined to create the internet. With advent of the internet, a worldwide opportunity became possible for online gaming. In the background of this new environment, online gambling is introduced to the online entertainment world.
In 1994, Antigua and Barbuda in the Caribbean passed the Free Trade & Processing Act that provided for online licensing of casinos. Internet gambling sites have increased from 15 in 1996 to 200 in 1997 (Wikipedia quote). A global industry consulting company, Frost & Sullivan, reports that online gambling revenues exceeded $830 million in 1998.
Christiansen Capital Advisors (an LLC that focuses on gaming and wagering) reportedly said that 23,000,000 people participated in some form of online gambling in 2005 on an estimated 2,000 websites. A November 2012 report by “Global Casinos & Online Gambling” (http://www.ibisworld.com/) estimates 2012 revenue from casino and online gambling is nearly $127 billion. An estimate from “intellogiX” (http://www.intellogix.com/) projects that $17-19 billion of that $127 billion will be from online gambling.
The United States is a late-comer to online gambling with its first online site beginning in Las Vegas, Nevada. The first licensed online gambling site in the United States was launched by Fertitta Interactive LLC. Fertitta Interactive was founded in 2010 but a real-money online poker site had to wait until December 2011 for Nevada’s approval of online gambling. At 9:00 am Pacific Time, April 30, 2013, Ultimate Poker.com was launched. The Golden Nugget and Station Casinos became their exclusive clients. It has been a long march and because Fertitta Interactive is first to capitalize on a new market opportunity, they are the pioneers of real-money, American online poker. An online source of information about what is happening in the industry is http://www.ultimategaming.com/ultimate-gaming-news/.
Fertittta Interactive is blazing its own trail in this growing form of American entertainment. In 2011, when Fertitta Interactive purchased the Oakland, California based company, Cyber/Arts Licensing LLC, they became a self-sufficient, vertically integrated online gambling enterprise. Other Las Vegas based casino owners have taken a different road.
ACEP, Caesar’s Entertainment Corporation, and MGM decide to partner with outside companies that have developed proprietary online gambling platforms. As noted earlier, ACEP partners with Global Technologies. Caesar’s chooses 888 Holdings PLC, a Gibraltar-based company that works with online United Kingdom’ casinos; and MGM announces plans to work with Bwin, the largest publically traded online gambling company in the world. Both 888 and Bwin incorporated in Gibraltar in 1997. (Gibraltar is a peninsula at the entry to the Mediterranean, off the south coast of Spain.) Both are publicly held companies. Bwin, in terms of employment, is the biggest with an estimated 3,000 world-wide employees.
Nevadans are at the beginning of a new era of online gaming. Station Casinos, with its continued appeal to local resident interest in games of skill and chance, chooses to focus on creating a local brand of online poker with http://www.ultimategaming.com/ . ACEP, Caesar’s Entertainment Corporation, and MGM are partnering with international gaming companies to pursue world wide appeal. This is not to say Station Casinos will not tap the world-wide market but their beginning points are different.
A common thread in casino’ online gaming websites (both pay-to-play and no-money gaming sites) is public introduction to respective casino entertainment networks. Everything from education in the art of gambling, to player benefits, to pictures and explanations of casino amenities will be advertised on online sites. Online gambling sites may offer many of the same players’ benefits that casino visitors are eligible for when they play at the casino.
In 1988, UNLV created the Center for Gaming Research. David Schwartz is the Gaming Research Center’s highly accessible Director. He is a great source of information about the gaming industry. The Center has a state-of-the-art library on gaming. Schwartz said, “Online gambling is a job creator that compliments the casino industry”. In addition to software programmers and service providers of online gambling, ancillary businesses like geo-location companies will grow.
Schwartz noted, “With New Jersey’s and Delaware’s approval, the history of online gambling is still being written.” Swartz explained, “New Jersey and Delaware approval of online gambling includes other casino games while Nevada’s approval is for online poker only.” Every state may have a different model for online gambling approval.
Schwartz said, “Online gambling will increase casino’ gaming revenues and state’ tax collections.” It is too soon to know how big the increase will be.
Long term investors like Global Technologies may have a jump on the online gaming market but relative newcomers like Fertitta Interactive, 888, and Bwin are focused competitors that are keen to be the best. To Nevadans, entrepreneurs that create jobs are just what the economy needs.
(A Version of this Article is Posted in the “Las Vegas Review Journal” 5/23/13)