Morgan Stanley Believes Seven States Will Have Online Gambling by 2017
Morgan Stanley predicts that no new states will launch online gambling websites in 2015. The financial institution previously had predicted 20 U.S. states would have iGaming by 2017, in what now appears to be a wildly optimistic gaming prediction.
Morgan Stanley believes California will approve online poker in 2015, but implementation of the plan won’t happen until 2016. The rollout of iPoker in California should have a major impact on the industry, because of the Golden State’s high population.
With each new state that joins the fold, more money is likely to be spent maintaining such gambling opportunities for Americans.
Money Spent Lobbying in 2014
That fact is important, because Sheldon Adelson has vowed to spend whatever it takes to see online gambling of all types banned in the United States. Currently, a bipartisan coalition of federal lawmakers have introduced Restore America’s Wire Act to the U.S. Congress, in hopes of following through with Adelson’s vision of a 50-state ban on online casinos, poker rooms, and sportsbooks.
Despite Adelson’s donations to anti-online gambling politicians, the pro-online gambling lobby spent more money in 2014 than the opposition. While political contributions do not always predict legislative or electoral success–Adelson spent $90 million to see Obama defeated in 2012–such contributions seldom hurt a cause. In fact, the fact the Restore America’s Wire Act bill exists in the first place is likely due to the money spent by Sheldon Adelson, who consistently has been the top political contributor over the last several years.
Sheldon Adelson Lost $10 Billion in 2014
Such money might not be as forthcoming in the near future, since Adelson lost $10 billion or over 25% of his total wealth in 2014. Those losses came from the huge drop in the price of shares of Las Vegas Sands Corporation, mainly due to the 50% drop in revenues of LVS Corp’s Macau operations.
The Venetian Macau and the Sands Macau have been effected by the Xi Jinping’s anti-corruption crusade, which has caused Chinese high rollers (including communist party elites and wealthy businessmen) from gambling in Macau since the summer of 2014. Of course, Adelson still has $27 billion to spend and is considered the 23rd richest person on the planet, so he is not hurting for cash.
California: The Tipping Point?
California legalizing online gambling might become the much-predicted tipping point for iGaming in the United States. According to traditional logic, enough states will legalize and regulate Internet betting that forward momentum will be too much to stop. Several reasons exist why that might happen.
If California licenses online poker rooms, it should be a much bigger success than the New Jersey online gambling operations, due to the sheer number of people. Those numbers should act as a beacon to other states, which also are likely to want additional revenues to make up budgetary shortfalls. Success breeds imitation, while Nevada, Delaware, and even New Jersey can hardly be said to have had successful launches of their iGaming industries.
Interstate Poker Compact
Also, Nevada and Delaware has an interstate poker compact. If California is followed by a half-dozen other states legalizing online card sites, then an interstate poker association might begin to take shape. Even if California doesn’t join such an assocatiation right off, its very presence in the industry might convince other states that it is worth launching their own industries, in the hopes enough little states join that a few of the big states sign on–much like what happened with the multi-state lotteries like Powerball and Mega Millions.
For some time now, there has been reports that legislators in New York, Pennsylvania, Illinois, or Massachusetts have discussed legalization. Any one of those states could have a major impact on the future of online gambling laws in the United States, for the reasons cited above.
Morgan Stanley’s Quote
As the Morgan Stanley report goes, it believes 7 states will have legalized online gambling by 2017 and 20 states will have live online sites by 2020. Among those 7 states in 2017, Morgan Stanley predicts Pennsylvania, New York, and Illinois. The report read, “We forecast a market size of $1.3 billion in 2017 with seven states live and $5.2 billion in 2020 with 20 states live.”
Therefore, if the next four states are California, Pennsylvania, New York, and Illinois, then it can safely be said that the tipping point will have been reached.
