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American Casinos Suffering From Oversaturation of Internet Gaming

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In 2011, casinos in Delaware were responsible for $230 million in revenues. Those in favor of opening casinos to contribute to a state's coffers point to the fact that casinos are highly profitable ventures. They claim the old adage has it right: The house always wins. And when it does, it wins big. Casinos in neighboring New Jersey generated $495 million in gross operating profit that same year, and gambling venues have traditionally augmented both states' incomes and reputations by encouraging tourism.

Many towns, such as Atlantic City, NJ and Las Vegas, NV have built both their reputations and their economies on the foundation provided by their casinos and the industries that have sprung up in support of them. Casinos in Atlantic City generated just under $2.9 billion in revenue in 2013, and over the years, have provided thousands job opportunities for the area's unemployed.

Seen in this light, they seem to be strong sources of consistent and significant extra income for state governments, but support for the construction of additional gaming houses is dwindling. The $2.9 billion Atlantic City casinos posted for the fiscal year of 2013 is approximately 6.5% less than the $3.1 billion they reported in 2012,  and marks the sixth consecutive year that casinos in the area have generated lower annual figures than they did the year before.

Three of the area's casinos have already shut down for good - the Atlantic Club Casino Hotel, Showboat, and Trump Plaza - and a fourth, Revel, will soon follow suit. This marks the biggest blow to the industry the East Coast has yet seen, and is predicted to result in New Jersey's losing ca. 9,500 jobs and billions of dollars of revenue. Much of this revenue is flooding to online casinos.

This flood has been the result of legalisation of internet gambling in many states, most notably Las Vegas where even the sports bookers aren't safe, in the face of competition from and other similar sites.

Atlantic City is in trouble, but it's not a special case of municipalities suffering from the oversaturation of the gaming market. Delaware's income due to the industry has dropped 29% since fiscal year 2011; Rhode Island predicts gambling-related losses of around $422 million over the next five years; and the state of Pennsylvania has reported decreases in casino-related revenue over the past couple years.

In spite of all this, states like Massachusetts and New York are floating the idea of opening their own gaming houses to supplement state income. In 2013, the State of New York approved a measure allowing for the construction of four casino locations in Upstate New York. The provision allows for the construction of an additional three downstate locations in seven years. Plans for the first new casinos are awaiting Gov. Andrew Cuomo's approval, and are expected to be given the go-ahead in late fall.

In the meantime, the Gaming Facility Location Board will hold so-called Public Comment Events, or public hearings, in which locals of each of these regions can voice their own opinions to the state government. These hearings will begin in Albany, New York, on Sept. 22nd, and will be live-streamed online for those who cannot attend but wish to witness the proceedings.

Khurram Aziz is a freelance writer and entrepreneur with over 10 years' experience in publishing. Please feel free to add him on Twitter @khurramaziz1981. Read more stories by Khurram Aziz.

Khurram Aziz is a freelance writer and entrepreneur with over 10 years' experience in publishing. Please feel free to add him on Twitter @khurramaziz1981. Read more stories by Khurram Aziz.

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