The Evolving Face of Internet Gaming
- by Kath Blackwell
EDITOR'S NOTE: Running an Internet Gaming business, like any
other Internet-based venture, may have legal risks associated with
it depending upon where you and your target customer based are located.
ALWAYS consult with an attorney before beginning a new business of
which you are not 100% certain of the rules, regulations and requirements.
Internet Gaming is a world virtually unexplored and untapped at this
point in the game, if you'll pardon the pun. The future is wide open,
allowing room for many different niches, opportunities and innovations
to expand to their full potential. We've only begun to scratch the
tip of the iceberg in this exciting moneymaking arena, and it's quite
easy to say that we ain't seen nothin' yet.
Amid controversy surrounding legal and ethical issues, online gaming
is still growing strong and the number of Netizens using these services
is increasing at a steady, rapid rate. For webmasters who are looking
for a project that is ripe with opportunity, online gaming could be
the answer. For webmasters who missed the "gold rush" of the early
days of adult entertainment, it could be a second chance to make a
big name in the Internet industry.
PROFILE OF AN ONLINE GAMBLER
When you think of people who are likely to gamble - what sort of picture
comes to mind? Somebody's grandma sitting in a bingo hall? Vacationing
couples huddled around video slot machines? A high roller slapping
down hundred-dollar bills like they're nothing at a high-stakes Blackjack
table? There are many different stereotypes to consider when pinpointing
a certain demographic for the average gambler. What's surprising is
not really how many different gambler profiles there are in the world,
but which type is the most common, and why.
Picture a woman in her mid-forties, recently divorced or widowed,
money-problems at home, suffering from mild depression, with an addictive
personality. This is the average gambler, according to studies conducted
at CyberAtlas.com, The International Women's Day support center, and
other demographic statistics organizations. While they differ in the
profile make-up for what turns a gambler into a gambling addict, they
all agree that the number of women gamblers - especially in online
casino settings - are increasing and have quickly surpassed their
male counterparts in the last 5 years or so.
In fact, a recent report released by GoodAsGoldCasino.com via an article
on CBS Market Watch, shows that there has been a huge increase in
female gamblers over males since 1998. The figure has increased from
a small 2-3 percent to a whopping 45-54%. That's more than a major
increase - that's a major revolution!
So why is it most casino programs still target a male-driven user
base? Casino ads can be seen all over the 'Net with naked or near-naked
models, wearing a come-hither grin and giving a sultry wink. Some
Web sites like GoodAsGoldCasino.com have seen the increase in women
gamblers and have responded with non-gender or game-based ads. Showing
jackpot offerings, screen shots of the slot machines or offering free
tutorials to learn how to play "safely from home" seems to catch the
eye of the female gambling consumer, placing the site in the most
positive light.
Jupiter Media Matrix has shown in its monthly demographic reports
that the female population on the Internet is growing. By the end
of summer 2001, over 53% of the surfers online in the United States
were women. Jupiter also provides facts supporting the case that women
are more likely to make purchases, use their credit cards, and sign
up for site memberships than men. Couple that information with the
higher rate of female gamblers and you can see why it's important
for anyone who is selling a casino-based program to consider selling
more towards the female audience.
THE BIG BOYS OF ONLINE GAMING
So who are the so-called big boys of online gaming? The most popular
sites on the 'Net are places like Casino on Net (www.casino-on-net.com),
Lasseter's (www.lasseters.com) and Gold Key Casino (www.goldkeycasino.com).
Ads for these sites can be found in popular Web sites such as pogo.com,
yahoo.com, iwon.com, iwin.com and other news, entertainment and media-oriented
sites. Most of the "big ones" have been around since about 1996, according
to their ads and mission statements. Some have webmaster affiliate
programs, and most pay on a player-use commission structure. 25-35%
of gambling losses is the typical payout structure seen on casino
gaming sites.
Recently a few of the adult industry players have gotten involved
in the casino side of the 'Net. After years of successful relationships
with webmasters all over the world, they are using time proven methods
to increase their traffic flow, membership sign-up ratios and quality
of members through their affiliates. And these affiliates are being
rewarded for their efforts with standard per-sign-up fees, ranging
from $25-35 per sign-up. No more waiting for their referrals to lose
to the big gaming sites, webmasters can cash in on their conversions
at the onset, and go on their way, another time-proven method that
seems to make for happy affiliates, versus the typical commission
structure that we see within the mainstream e-commerce world.
A new group that's making its mark in the world of online casinos
is made up of the actual powerhouses and big names of 'Vegas. Mandalay
Bay, Harrah's and other infamous Strip establishments have made it
clear they are heading to the World Wide Web, and plan to take over.
One might ask, who better to run the Internet gaming industry? The
veterans of 'Vegas have years of experience and information under
their belts and could literally make a killing against small companies
that are just starting out on the Web with little to no experience
in the real-world business of gaming. Unfortunately, making the transition
from brick-and-mortar casino establishments may not be as easy as
the 'Vegas giants might think. There are lots of things they will
need to consider and tackle before becoming successful online.
LEGAL HURDLES
So what's stopping the big 'Vegas companies from swooping in and taking
over? Online gaming is still not 100% legal in the United States.
Most companies have taken their casino businesses offshore in order
to avoid legal hassles. However, Political and Industry analysts such
as those at Bear Stearns (www.bearstearns.com) expect online gaming
to make some major legal headway over the next couple of years, with
Nevada state law paving the way to legal gaming across all 50 states.
Dublin, Ireland hosted the 5th Annual International Symposium on Internet
Gambling Law and Management November 25-27th. Among the topics discussed
were new laws and industry regulations. Each year this conference
draws attendees from 40 different countries and this year was no different.
Hot topics sparked by the "yes-you-can, no-you-can't" legal battles
in the US.
Currently, online gaming only accounts for a mere 1% of annual gaming
revenues in a $2.2 billion dollar, world-wide industry. Experts suggest
that if the laws turn in favor of online betting, the overall figure
for online-based gaming could increase to exceed the annual US $60
billion dollar land-based gaming average. We're talking big bucks
and big stakes.
The MGM Mirage has applied for a license to open an online gaming
establishment on the Isle of Man where Internet gaming is legal. According
to a spokesperson for Harrah's Entertainment, Harrah's is keen on
entering the casino race but won't support any political proposals
to make 'Net gaming legal "until certain regulatory safeguards" are
in place. In the meantime, both casinos are offering "fun" and "free
for play" gaming options on their Web sites, to satisfy the requests
of surfers and out-of-town casino patrons.
REGULATION IDEAS
Typically when trying to overcome political, legal or ethical objections,
groups will try to put in place programs or services that will "self-regulate"
or "police" their industry. Sometimes this makes the general public
feel much safer about the industry as a whole, other times they see
it just as a feeble attempt to legitimize their questionable business
practices. Whatever the public thinks about online gaming, the self-regulatory
services have already begun to surface and are finding their way onto
casino sites all over the globe. The Electronic Gaming Commission
(www.egamingcommission.org)
is one of these services. According to their Web site, their job is
to "protect online gamblers by providing accurate information about
the honesty and integrity of gaming Web sites, and by mediating between
concerned players and gambling companies in case of disputes." They
do this by taking consumer complaints; investigating alleged fraud
and posting, when programs cheat and/or don't pay their members. A
list of approved sites is also provided, and those sites are allowed
to post a button link saying they are approved by the eGamingCommission.org.
The Internet Gaming Commission (www.internetcommission.com)
is another organization that reports on fraudulent casino programs
and honors honest services with positive listings and recommendations.
Run by an "independent service," this program claims to "comb the
web and let you know which gaming establishments are licensed and
which ones are not." They also report information such as minimum/maximum
bet requirements, special requirements- such as bank account set-up
fees and transaction limits, etc. For the at-home Internet gambler,
resources like these could be very helpful. Unfortunately, there is
a large margin for error on consumer-reported and volunteer-searched
resources such as this, so consumers that are truly looking for solid
information about a potential gaming site should double-check the
results with another service, or on their own.
And finally the Interactive Gaming Council (www.igcouncil.org),
based in Vancouver, Canada, is another resource that is seen frequently
on larger sites, like Casino on Net. Similar to the sites listed above,
the IGC also reports "bad" sites, and honors "good" sites with positive
listings. However, the IGC also offers opportunities for gaming site
operators to reclaim monies due to them, report fraudulent transactions
from members and compare notes with other gaming services.
GETTING STARTED
So what's a webmaster to do when considering the development of an
online casino site? You need to study the current events involving
the local, state, regional and national laws with regard to online
casinos WHERE YOU LIVE. Knowing the laws in Amsterdam won't do you
any good in Iowa and vice versa. You need to find out what is acceptable
and what isn't. The old rule of thumb was that inadvertent advertising
of a casino program on a site that's theme was unrelated to gaming
was okay in any of the 50 states. But laws change and can be interpreted
differently depending upon your local authority's view. It's just
like working with pornography and obscenity standards - local, community
law is the bottom line.
Another consideration is the types of games you will be promoting.
You need to do a current check with statistical sites to see what's
popular at the moment - the Internet is notorious for something being
"hip" one day and totally "out" the next. At the time of this writing
the top five games world wide were: traditional casino games, bingo,
sports betting, lottery and keno games, according to a study reported
on CyberAtlas.com.
You also need to figure out where to get your traffic. Adult Sites
are a prime opportunity to cash in on exit traffic, strip poker-like
games and other adult-theme programs. Mainstream sites, such as sports-oriented
portals, information sites and news filters are another great resource
for casino-primed traffic. Diverting that traffic to your own casino-
or to your casino affiliates- should be handled similar to the manner
in which you would funnel your adult traffic.
Target your surfers depending upon the orientation of the traffic,
like a banner click-thru program, search engine, directory or links.
Or from the site they came from, whether it's sports-related, freebie
gaming, womens' interest sites or news-based portals. And of course
the best way is based on whether or not they are pre-qualified as
membership purchasers, such as current members of your adult or non-adult
membership, or product purchasing programs. Knowing the three "W's,"
who, what, and where- with regard to traffic, can make all the difference
between a sale/commission and wasted bandwidth.
Keeping all the facts in mind regarding legal issues, demographics,
consumer interest and upcoming events, should help you get started
on the road to building your own casino-based business. Staying on
top of the things that affect your potential business the most is
the best thing you can do to ensure the long-term success of your
new venture. Trying new ideas and expanding on old ones is a great
way to keep your business fresh and alive. Keep these tips in mind
and you'll be laughing your way to the bank in no time! Cha-ching!
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