Online gambling is coming to the United States, and the ramifications could affect everything from game companies and social networks to the integration of real and virtual businesses.
In late February, New Jersey Governor Chris Christie signed a law allowing the state's Atlantic City casinos to offer online gambling. The exact rules haven't been decided, but casinos will be allowed to deliver the same games they offer at their physical locations. Bettors will probably have to show up in person at a casino to prove they are at least 21 years old and register with a credit/debit card or bank account, reports have suggested.
Also, bettors must be physically present in New Jersey in order to gamble online. New Jersey thinks it can effectively employ age-verification procedures and location-based technology. The law provides for a 10-year "trial" period, but can you imagine New Jersey not making online gambling permanent if it's profitable?
Internet Deals Gamblers a New Hand
Seeking new revenue, states that already allow casinos to operate are now more amenable to online gaming.
For years, the gaming industry has unsuccessfully lobbied Congress to allow nationwide gambling. Simultaneously, the US Department of Justice has pursued illegal online gambling activities, including those of PokerStars, the largest online poker site in the world, with more than 50 million members. Last July, PokerStars agreed to pay hundreds of millions of dollars to the Justice Department and non-US poker players to settle a court case that charged the company with illegal gambling, money laundering, and bank fraud.
PokerStars has other legal issues, but it's hoping they won't thwart its efforts to enter the "real world" of casinos. Parent company Rational Group applied to purchase the financially troubled Atlantic Club casino in Atlantic City. If government agencies approve its application, this could be the start of integrating online gambling with US meat-space gambling. The ramifications are fascinating, but potentially unpleasant.
For example, the online games giant Zynga is entering the gambling business. It already offers free poker games in the States, but recently partnered with the Gibraltar-based online gaming company Bwin.Party Digital Entertainment PLC to develop online games for real betting in the United Kingdom later this year. FarmVille slots, anyone?
Zynga, which made its reputation on Facebook, calls itself the "world's leading provider of social game services." What if social networking combined with gambling in casinos across the US and elsewhere? Will $1,000 chips display a picture of Mark Zuckerberg? "Here's $10,000. Gimme 10 Zucks."
Don't laugh. Facebook has teamed up with Britain's Gamesys to offer online betting games. Bingo Friendzy in the UK Casinos are already buying technology firms. Zygna might be more valuable as a casino's software subsidiary than continuing its current lineup of dopey games.
Online gambling could spark some American developers to switch their efforts to coding the next great gambling application. Gamification might take on new meaning as corporate healthcare gamification software evolves into betting on which employees will succeed or fail to complete their assigned number of pushups or track laps.
IT directors might find employees using their corporate devices for betting and carrying on social networking conversations. Could these gambling-based social networks be used to obtain confidential information? "You can't pay Blackjack Mavens $50,000? Provide inside information about your company's next quarterly financial results or we'll remove your right hand."
Online gambling won't be a problem only for US companies with offices or employees in New Jersey, however. Nevada has legalized online gambling and the Delaware Lottery Office is seeking bids to develop that state's online gambling system. Three states already offer online gambling and others are exploring similar legislation, Reuters reported.
Furthermore, casinos are already discussing online gambling networks that allow users in one state to gamble within a network of casinos in-state, regionally, nationally, and even internationally. Networks can be hacked, of course, and gambling systems would be prime targets for stealing credit card and bank account credentials.
Online gambling could generate additional income for casinos and the businesses that rely on them, as well as helping cash-strapped states. It might result in interesting new social networking applications. Understanding the dynamics could help other enterprises looking to integrate online and physical businesses or those running online gambling advertisements.
Enterprises and casinos aren't very different, really. Ultimately, all business is a gamble.
— Alan Reiter, President, Wireless Internet & Mobile Computing