US Casino Companies Look to Asia and Online for Next Growth Phase

Posted on: October 1, 2013, 05:30h. 

Last updated on: September 29, 2013, 04:46h.

David Sheldon Read More

These days, it seems as though every state in America is looking for a way to expand gambling, usually by adding more licenses for land-based casinos. But according to executives in the industry, that expansion is either going to come to an end very soon, or there will be more casinos than the market can possibly support.

“New England is saturated,” says Penn National Gaming President Tim Wilmott, . “The market is crowded in Ohio. It’s a little underserved in Florida.”

Lone Star State Still Casino-less

Experts point out that there are some places where more casinos might be welcomed. One major market that is very underserved is Texas, which has no major casinos despite being one of the largest and most populous states in the country. But overall, it’s unlikely that many companies will be able to improve their revenues by building new casinos in the United States these days.

New England and other Northeastern states are particularly saturated. In recent years, Maine, Pennsylvania, Maryland and Delaware have expanded the number of casinos offered, while Massachusetts and New York are both currently planning to add several casinos in the years to come. Connecticut also has two existing casinos and may decide to add expanded video gambling to other venues.

Internationally, many markets are quickly reaching the same problem. Europe has what has been described as a “mature” casino industry, with new construction of casinos being unlikely to increase revenue. However, there are still areas of Asia that can be developed further, including Japan and South Korea. Meanwhile, South America and Mexico are also markets that could be tapped further.

Looking Forward, Growth May Be Online

That leaves American casino companies with only a few ways in which to grow their businesses. They have the option of attempting to gain licenses in the few markets that are still ripe for casino growth. Perhaps a more viable path is through acquisition and mergers, as consolidation could benefit companies that can eat up smaller brands.

But the biggest growth market of all may be online gambling. That was a big topic of discussion at this year’s Global Gaming Expo (G2E), where industry insiders speculated about what the future of online gambling held in the United States, and how casino companies might be able to use online gaming to grow their businesses.

Of course, online casinos and poker rooms come with their own issues, not the least of which is the uncertain regulatory framework for online gambling in the United States. Most people at G2E were pessimistic about the possibility of federal legislation that would regulate online poker, but they were cautiously optimistic that state-by-state regulation could ultimately help them achieve better profitability.

One major question, however, is just how much growth will come from online gambling. That’s because nobody is quite sure what impact online casinos will have on their brick-and-mortar counterparts.

“That’s the one thing that keeps me up at night,” Wilmott said. “Right now, what’s going to happen is as clear as mud.”

Many casino executives feel that online gambling can only help. After all, the expansion of tribal casinos across the nation actually proved beneficial for Las Vegas, and many believe that online casinos will create new customers for the industry in the same way.