The curious divide between online and brick and mortar gambling

Some of you might remember the days when on major gaming shows table games and tables related manufacturers still took up quite a bit of floor space. Having started my gaming carrier almost 30 years ago on the tables side of the land-based gaming industry, I always kept a tag on technological advances and change in general. Change and the way people react to it always fascinated me.

The first decade of the new millennium saw slot machine manufacturers take over the shows, exhibiting on bigger and bigger stands. While some of the major manufacturers are still a prevalent feature of major industry exhibitions, companies serving the online industry have visibly become the favorites of show organizers.

I always wondered at the divide between these two principles of gambling. Why is there such a marked separating line between them? What makes them so utterly different while they are seemingly based on the same basic principles.

When you ask respected figures in the land-based industry to name 5 major online companies, they will have a hard time. And to the question as of how many contacts they have “on the other side of the fence” they will either draw a blank or give you one of those funny smiles. While show organizers keep labelling all these guys as belonging to the same industry, thus inviting them to their “gaming exhibitions”, they couldn’t be farther apart.

One would logically assume, that online grew out of land-based gaming with the advancement of technology and the proliferation of the internet. While roulette will have the same rules and house edge on both sides, how it’s being sold and to whom differs immensely.

Just like the early casinos weren’t exactly known for their AML programs as Bugsy Siegel would be able to tell you, was he still among us, online businesses started out as, and to some extent still are the investment choice of adventurous entrepreneurs, who do not have a board of directors dictating to them which laws they should abide by. And it is this very distinct origin which makes it so different from what we know as traditional gaming.

Lately I have been involved with companies in the online sphere and to my surprise I learnt that the laws of gravity don’t work the same way here as in land-based casinos. Talking to seasoned online professionals in charge of huge companies, one would have to revise their casino dictionary. Hold percentage all of a sudden becomes “profitness”, the concept of theoretical win simply doesn’t exist, and ADT segmentation gives way to player profiles based on how easy it is to take their money.

On the other hand, while the land-based industry still very much struggles with data and how to make sense out of it, our online friends take all of it for granted and can be considered more like IT people with a gaming twist. At the end of the day, the product works, the numbers grow like they never have in the brick and mortar world, and the industry is swarming with new self-made millionaires.

I believe you see now, how these two industries or rather the people running, building and growing them come from very different backgrounds and why joint ventures of great companies on both sides are so rare.

As most industries have a tendency towards consolidation, I believe it is only a question of time till true online gaming giants will emerge and give companies like Sands and the like aa run for their money. The big question is will there be mergers of online and land-based companies shaping the future of gambling as a whole or will the divide remain in the longer run as well?

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