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Well guys, it’s been 3 years since that dreadful day in 2006, when the UIGEA was back-doored, as an addendum to a Ports bill. Remember those days of Frist, Kyle, and the others that made it happen….I still remember watching Live CSPAN, and seeing the final overwhelming vote pass through the House…..I couldn’t believe my eyes and ears, that it was happening.
In any event, here we are in 2009, and the industry has changed. Many affiliates have gone belly-up in the industry, and many of us, hang on for dear life, as the saturation of the business coupled with UIGEA restrictions, has made it infinitely harder to make a decent living.
My intuition tells me that we may be in for a radical change in the industry sometime in 2010 or 2011. The Obama administration has inherited a massive debt, and continues to add to it, and the potential for online gambling tax revenue, may once again become a hot issue in Washington. In tough times, all potential options needs to be explored, and I am positive that online gambling as a tax revenue stream, will be looked at for sure. This will surely lead to amendments or the overthrow of the UIGEA, as it exists today. Hopefully, Barney Frank’s push to delay the formal implementation of UIGEA to a year out from its official implementation in December, 2009, will buy us all some more time.
I’m not sure if legalization and taxation of online gambling will be a good thing for affiliates, however. It is my view, that once legalization occurs, the ever-ready Las Vegas casinos (who you can be sure have been developing on-line solutions in the background), will pounce on the opportunity presented to them, and effectively, may cause the deathknell of many of the International programs that currently accept U.S. players. This, in my optinion, may adversely effect U.S.-based affiliates, since many of these Las Vegas entities will receive advertising directly from their brand-name awareness (i.e., they won’t need affiliates).
How do you all feel about where things are headed into 2010 and beyond ?
A good post …
Some thoughts that come out of it.
1) Is it time for UIGEA to be repealed?
Given that the US public is mixed at best about online gambling (due in large part to a scare-mongering lobby group) I’m not sure that there is yet the political will to impose this change onto the American populace. Obama has much bigger fish to fry yet – healthcare, war agenda, fiscal easing.So I don’t see it as an issue for the first term – unless it can be demonstrated to have a hugely significant impact on tax revenues – and I just don’t see those studies happening yet.
2) What will the change be initially?
You’ve hinted that it might be to allow US registered casinos only into the game initially – and I agree with that.You’ve hinted that affiliates might be locked out – and I’m not sure I agree with that. It is not one giant cartel where everyone shares. Casinos will want bigger market share – and affiliates can provide that. Of course the margins will be tighter …
3) How will it affect incumbant players?
I also agree that the smaller outfits based in Costa Rica and Curacao will be affected negatively. They are in the main bottom feeders – low rent outfits – under-capitalised operations who have openly flouted US jurisdiction.But (unless the US want ANOTHER stoush with the WTO) I do also expect to see some of the big brand name UK and European bookmakers and casinos want a share of the action. Particularly up and down the east coast/ west coast where these operations will have some brand name appeal among mobile people who travel abroad.
These outfits use affiliates – know the value of the structure – and will continue to retain affiliates.
I my opinion there will be change, the big will get bigger, and the small outfits will perish. But I am comfortable that I add value as an affiliate to any organisation I work with – and I’m sure that they want that work to continue.
:hattip:Thanks for your comments and questions, Gooner. Please keep in mind that my initial post was based on a purely US-perspective. Surely, the European community, the WTO, and beyond, will play a huge factor in all of this as well.
