Report Shows Online Gaming Now Competing with Other Entertainment Options

The study is by the Dublin-based consultancy, Research and Markets, which has just begun tracking online gambling.

To attract the new customers, online gambling formats are changing, according to Laura Wood, a spokeswoman for Research and Markets. This is especially true for lotto. “For the first time gambling products are competing with other forms of mass entertainment for consumer attention and spending,” said Wood.  “We forecast that U.K. consumer spending on online gambling will increase from £ 660 million in 2005 to £ 1.6 billion in 2010. At the same time the number of active U.K. clients will grow from 1.1 million in 2005 to 2.1 million in 2010.”

The new report profiles 30 online gambling industry leaders, who are either based or listed in the U.K., or target U.K.-based gamblers. “An historic, cultural acceptance of gambling, a regulatory framework which directly confronts the issues unique to online gambling and the benefits of London as a global financial center have made the U.K. an essential base for many of the leading operators,” the report said. “Collectively, these operators constitute a large proportion of the total market for global online gambling.”

Industry Consolidation

What is more, the report said, last year saw a massive industry consolidation with 32 transactions involving online gambling operators worth over 3 billion pounds - up from nine deals worth 200 million in 2004.

The success of online gaming in the U.K. has left analysts befuddled as to why the U.S. government is so aghast at the drivers of the trend.

Washington D.C.-based Cato Institute policy analyst Radley Balko said that Web-based gambling is still a $12 billion industry. “And so just as has happened every other time our government has attempted to ban vice -- see illicit drugs, prostitution, and alcohol -- efforts to ban online gambling have not only failed, they've created more problems than they've solved."

Balko notes that online gaming sites are “begging to be legalized” and regulated. “A better approach would be to allow them to set up shop in the U.S., contribute to the U.S. economy, be regulated by U.S. markets, and be subject to U.S. courts,” said Balko. “Of course, that approach would require Congress to treat Americans as adults, and understand that we ought to be free to spend our own money as we please. Even in ways that some morally crusading Congressmen happen to find distasteful.

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