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A Future Scenario For The Casino Software Industry

By: Mark Freedman, Thursday May 14th 2009
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The passing of the UIGEA in 2006 in the United States led to an exodus in the online gaming industry. Those leaving included online gaming operators like Party Gaming and 888.com. The financial services provider Neteller also closed its doors to the American market. Online gaming software providers like Cryptologic and Playtech too shut down their American operations when the UIGEA was passed. The biggest blow perhaps was when Microgaming was forced to leave in 2008 following the domain name seizure case in Kentucky.

Though some players continue to service the American online gaming market, the size of the market has shrunk considerably. Before the passing of the UIGEA the American online gambling market contributed a major share to the worldwide market. The problems in the United States have resulted in a reduction of resources being fed into the online gaming industry. The development that one saw in the years just before the UIGEA was passed no longer exists. However, things may change for the better. As outlined in the article "Barney Frank Introduces Anti UIGEA Bill" a bill has been introduced that seeks to overturn the UIGEA. If that happens then online gambling in the United States will be legalized and regulated. This will lead to the kind of mergers and acquisitions never seen before in the industry.

Online gaming software drives the industry. The first targets will be the privately held online gaming software companies. Wizard Gaming and Microgaming are names that readily come to mind. Wizard Gaming is less than one year old and has less than 25 online games on offer. But the games are of high quality. Therefore Wizard Gaming is likely to be a prime target for acquisitions. Microgaming can be a more difficult proposition. Despite being privately held it is the leader in the online gaming software industry. It has over 400 games in its portfolio and has licensed many more brands than other software providers. Microgaming is a leader in quality as well and regularly introduces innovative products. It is difficult to assess the kind of price Microgaming would demand. The possible buyers could be the publicly held online gaming software providers like Cryptologic or Playtech who have the potential to raise funds in the capital market. Or the buyers could be the large gaming operators who can garner a huge market share of the online gaming industry by having the Microgaming brands under their umbrella.

Another development that will be imminent if the online gambling industry is legalized in the United States is the entry of land based slot machine developers into the online arena. Companies like WMS Gaming, International Game Technology and Bally are big names in the land based slot machines industry. Their machines can be found in all major land casinos, malls, slots kiosks and wherever there are slots machines. Despite the development in online slots in the recent years, land based machines from these manufacturers retain an edge. The only reason that these players have not entered the online gambling industry so far is that the market has not been big enough. Once online gambling is legalized in the United States the repressed market will zoom. Then these companies can use their resources and experience to produce some amazing online games that will change the face of online gaming. In fact they will stand to generate tremendous business by simply converting their patented and much sought after offline games to online versions.

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Comment by: Channy On: December 27, 2009
The way things are headed these days quite honestly I think that we'll probably reach a plateau at some point in the near future in terms of where things are going with internet casinos and gaming although there will constantly be room for some forms of innovation that can be had.
Comment by: Steve Brando On: December 13, 2009
No one can really predict the future in terms of where things are going ultimately with online casinos but my personal view on it is that this industry will prosper regardless and will continue to grow. Over the next five years I would expect that we'll see some significant changes in the way that things are run and managed in the industry but there will be some shifts for sure.
Comment by: Blinky Roast On: November 12, 2009
I would like to see more advanced slots and more 3D type casinos to play at. More of a well networked solution a sort of Second Life type experience in an online casino is yet to be had and I think would be a huge success with players in the future.
Comment by: budahbless On: November 05, 2009
Overall I think that one of the most critical things that everyone wants to see is that there is progression towards making slots games that rival that of what's found in land based casinos and that's developed by some of the better land based gaming software providers like IGT, WMS, etc... I think that 3D casinos would really be a cool idea to see as well provided that they weren't sluggish and took forever to download which I think is part of the problem right now. As technology evolves though so do these kinds of things.
Comment by: Randy D On: September 17, 2009
As you see people rallying and things coming together now I beleive that regulation should be set into motion within the next 24 months or so. It will be a huge deal and will mean a significant amount of revenue for the government which they definitely can make use of!
Comment by: Kenny Curron On: August 29, 2009
I agree with casinowizard having games that have an aspect to them whereby you need to complete certain tasks to feel like you're accomplishing something is definitely a game that I'd be interested in playing. I think that such a game would be very interesting and exciting to play as well.
Comment by: casinowizard On: August 24, 2009
I think multi-player type games are a good idea. I think that games that involve an element where users can collect coins or some other asset within the game that they can then either use to buy something within the game or to unlock a level would be a great approach. I think that it would really bring slots gaming and online casino entertainment to the next level. I think that Microgaming is heading down the right path with their recent games release which includes the new Wealth Spa video slot game that allows you to collect coins in the game which can then be redeemed to enter into different bonus round stages.
Comment by: Juda On: July 28, 2009
Seeing some more multi-player type games would be really great in addition to some more comprehensive tournaments. I think that there's a big market for tournament play online and if someone is able to execute properly on it they'll really be able to reap the benefits of. Software companies that don't have slot tournament play within their software clients really are causing their operators to miss out on this great opportunity.
Comment by: Hero On: July 13, 2009
I'm not so sure that the caliber of the products that some of these companies that produce land based gaming machines would be that much better then what's already out there. I'm sure that WMS and some of the other companies would innovate and introduce some of their elaborate flavor to the games they produce and release but at the same time I think that there'd be a good chance that they'd buy companies like Microgaming, Cryptologic, Wizard Gaming and the others out there!
Comment by: Steve Brando On: July 03, 2009
Agreed! I think that the caliber of games we're currently playing will definitely be surpassed by that of what would come if and when regulation of online casinos takes place. I wonder if companies like Microgaming, RTG and Cryptologic would be swallowed by big Las Vegas gaming firms. My beleif on it would be that if there is regulation that the big software companies like IGT, WMS and Bally would buy all the currently big online casino software companies.
Comment by: Danny Spicer On: June 10, 2009
I'd really love to see what kind of software WMS would come out with in regards to slots games online. I could only imagine how elaborate and great they'd be... I actually look forward to a world of online casino regulation.

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