What’s the most popular form of online gaming? Surely one of the answers has got to be Internet Gambling which according to the American Gaming Association the Justice Department in the US considers “illegal under existing law.”
What is amazing are the facts from the AGA:
- The first online gambling site launched in August 1995. It is currently estimated that there are well over 2,000 Internet gambling Web sites offering various wagering options, including sports betting, casino games, lotteries and bingo.
- Internet gambling revenue in 2005 was estimated at $11.9 billion and is projected to double by 2010, according to Christiansen Capital Advisors (CCA).
- CCA estimates that nearly 23 million people gambled on the internet in 2005. Approximately 8 million of those gamblers were from the United States.
Keep in mind that gambling revenue for 2004 according to the AGA was $78.6 billion across everything from Card Rooms to Lotteries. (See Fact Sheets : Statistics.)
There is a 2006 State of the States (PDF) report which includes a section on Gambling and the Internet (and a spotlight on poker.) 4% of the US population gambles online, but that is a doubling from the year before. A greater percentage of online gamblers are men (68% men to 32% women) while among casino customers the numbers are close (53% to 47%.) There are differences in age (online gamblers are younger.) More online gamblers have a university education and they are affluent. They use the net heavily for things like online banking and 49% of them have posted to a blog in the last year! They like online gambling because it is convenient.
For a summary article that led me to this report see the Reuters story from May 8, 2006, Online gamblers doubled in 2005: study by Paritosh Bansal.
You wonder whether Canada is different. Its hard to find a comparable study but, the Canadian Gaming Association has some stats at Canadian Gaming Association. The rhetoric of the site is, if anything, less balanced. They talk of creating “a better understanding of the gaming entertainment industry and the issues that affect the thousands of businesses across the country that depend on it for their livelihood.” Defintely an advocacy group.
One site that does have critical information is the Ontario Problem Gambling Research Centre which, unlike the Alcohol and Gaming Commission of Ontario actually has information about the effects of gambling. For example, they have an abstract and links to reports like, Gambling@Home: Internet Gambling in Canada. The following is one of the Key Findings:
Online gambling has unique potential to increase the social cost of gambling and problem gambling because it combines the acknowledged double threat of high speed and convenient access with a technology that appeals to youth. Unregulated Internet gambling also has a potential for criminal involvement.
Mark my words, despite how the gaming associations try to spin it, gambling is coming back as a social issue. It will play out differently now that governments are addicted to it in order to raise revenue. Note, the final page of 2006 State of the States (PDF) shows a marked rise in the number of people who think gambling is “Not Acceptable for Anyone” (from 15% to 18% between 2005 and 6) and a corresponding drop in those who think gambling is “Perfectly Acceptable for Anyone” (57% to 54%). This is after years of stable numbers. Why the change? Is it a blip or is it indicative of a new wave of prohibition? What would trigger such a wave? According to Gambling in California (CRB-97-003), a 1997 California Research Bureau report by Roger Dunstan, in the second chapter on the “History of Gambling in the United States” (last paragraph),
The first and second waves ended in part because of a resurgence of public concern about morality and scandals in gaming. People can live with adverse odds but not cheating. What kind of events could lead to scandals today? If lotteries were plagued by fraud that would probably have an impact on people’s perceptions.
Could poorly regulated offshore online gambling trigger a reaction? If online gambling overtakes taxable or government run gambling, and if there are a couple of scandals involving cheating by online gambling sites, we could see the mood swing rapidly towards prohibition (with all the problems of prohibiting anything online.)