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Black Friday to Affect Online Gambling Growth

By: Joan Peppin, Friday June 17th 2011
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It was obvious that the events of Black Friday and Blue Monday would affect the online gambling volumes. The question was by how much. The stake holders in the online gambling industry were waiting for some credible agency to do the number crunching. Now the reputed consulting firm H2 Gambling Capital from Manchester has come out with its assessment and the verdict is worse than imagined. Online gambling growth will slow down to 4.4% this year. This is the slowest annual growth the online gambling industry has experienced since data tracking was started way back in 1998.

At the beginning of 2011, when no one could have predicted Black Friday, H2 Gambling Capital had predicted gross win forecasts for 2011 of €25.00 billion. This had represented a growth of 10.2% on the gross win for 2010. Based on preliminary results gathered for the early part of this year, and particularly factoring in the impact of Black Friday, H2 Gambling Capital has downgraded the gross win to €23.76 billion. This works out to the 4.4% growth stated earlier.

H2 Gambling Capital listed several reasons for the slowing down in growth of online gambling. The main one was impact of Black Friday on the online poker market in the United States. The H2 Gambling Capital release said, "Black Friday (and subsequent actions) occurring in the US that have decimated the scale of the Internet poker industry in that market. At this stage we have calculated that the impact will equate to as much as €765 million of lost market value this year and a further €100 million loss next year."

The second most significant reason was the impact of the Japanese earthquake on the Japanese Racing Association, which is by far the largest interactive operator in the world. H2 Gambling Capital indicated that the JRA's interactive business would be down approximately 13% year-on-year in 2011. The other reasons given were the economic backdrop and slower-than-expected regulation of online gambling markets.

The H2 Gambling Capital report had a silver lining. It stated that the global online gambling gross win excluding the United States and Japan is expected to grow by 12% year-on-year in 2011. The main contributor was the expected launch of online poker cash games and online casino gambling in Italy in the middle of this year. H2 Gambling Capital expects some measurable growth in online gambling as a result of the moves towards regulation in European countries like Greece, Belgium and Spain. Regulated online gambling is expected to become a reality in these countries sometime in 2012. H2 Gambling Capital has not considered any additional contribution from Germany because it feels that the present proposals put out by all but one of the German states is too restrictive to generate additional business.

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