New Jersey Gambling Data Points to Complementarity Rather than Cannibalization

The two biggest land-based casino operators in New Jersey - Ceasars and the Borgata - are also the most successful in the online gaming market and are in the best position to dispell the cannibalization fears spurred on by Sheldon Adelson's campaign against Internet gambling.

In its public messages, Sheldon Adelson’s Coalition to Stop Internet Gambling has been playing on some of the worst fears and concerns of Americans. The communications are executed in the best prohibition-era or totalitarian-propaganda style and the regulation of online gambling is compared to allowing heroin use or giving free rein to terrorism. Regulated online gambling would allegedly facilitate money-laundering and serve the interests of organized crime, all at at the expense of the young, the poor, and the elderly.

The messages of the Coalition to Stop Internet are reminiscent of the prohibition campaign

Albeit in a low-key manner, one argument that is always present - and which some suspect is central to Adelson’s own motivation - is that Internet gambling “destroys jobs” and would have a devastating effect on the 300,000 Americans working in the casino industry. Never mind that this is refuted by statistics and research in the European countries where online gambling has been regulated for many years.

"The online gaming sector is growing but its growth is not taking place at the detriment of the land based sector." http://www.egba.eu/pdf/EGBA_FS_MarketReality.pdf

Fortunately America now has its own data-generating test markets for regulated online gambling and poker in particular. New Jersey is very valuable in this respect with the - lucrative! - involvement of the major brick-and-mortar casinos - Ceasars and the Borgata. Because of the short time period, the body of evidence may as yet be too thin to convince the opponents of regulation but the data confirm the very different product and player profiles for online and land-based gambling.

Keith Smith, president and CEO of #BoydGaming (the company that operates the #Borgata and shares ownership with #MGM) recently commented on Borgata’s market-leading figures in New Jersey:

“These results also once again demonstrate online gaming’s potential to expand our business. Online gaming is growing our database, creating a long-term opportunity to market Borgata to an entirely new group of customers.”

Borgata COO Tom Ballance confirms Internet gambling is not a threat to land-based casinos. "When we match up databases, the great majority of players who were playing online have not been to Borgata in well over a year. And the vast majority have made fewer than two trips in the past year. So it's a different customer."