Mayor Ray Nagin said Wednesday he is abandoning his proposal to create a downtown casino district as a way of revitalizing the citys shattered economy, bitterly complaining of resistance from politici - Friday 21st of October 2005
Britains casinos have missed out on a boom in online gaming over the past several years, but deals with sports-betting firms still offer a belated route into the new multi-billion-dollar industry.
Online casinos and poker rooms are currently raking in hundreds of thousands of dollars every hour of the day in a market valued at up to $12 billion (6.8 billion pounds) a year globally.
But Stanley Leisure, Britains biggest casino operator, has apparently resigned itself to taking a back seat. On Monday, Stanley sold its online casino business to Leisure & Gaming Plc for just 1.9 million pounds.
"If Stanley could have made it work, they wouldnt have sold," said analyst Charles Wilson at Bridgewell Securities. "This shows the online casino brands are so much more powerful than the bricks-and-mortar casino brands."
And while shares in online gamers have recently taken a dive, the companies are still generating large amounts of cash. PartyGaming, for example, is earning revenue of just over $100,000 an hour and looks set to do so with less competition than once feared.
Analyst Paul Leyland at Seymour Pierce said Stanleys problems were shared by all bricks-and-mortar casino firms. "All UK terrestrial gaming operators have struggled to gain traction online," he said in a research note.
Part of their problem is that while individual casino names such as Crockfords and Les Ambassadeurs might ring bells, the companies behind them, Stanley and London Clubs, have virtually no brand recognition.
Only betting shop owners such as William Hill, Ladbrokes and Coral have succeeded in using their brand names to advantage, largely through sports betting.
Gala Group struggled to develop its own casino Web sites, said Chief Executive Neil Goulden, but all that changed when it agreed this month to buy betting shop chain Coral Eurobet for 2.18 billion pounds.
"Leaving aside the poker guys, the models that seem to work are the Williams Hill model, the Ladbroke, the Coral Eurobet and indeed the Sportingbet model, where the entry portal for the online business is sports betting," Goulden said.
"People enter for the sports betting and they trade on into the casino," he added. "We were amazed to see how much more successful Coral Eurobet had been in developing a casino site than wed been, simply because they had the entry point of sports betting."
Goulden said that the need for a sports-betting element raised the online casino worlds barriers to entry.
"In terms of having a sports book, if youre not one of the recognised big bricks-and-mortar operators, youre going to have problems having any credibility for people to take your odds," he said.
Rank has also chosen to twin online casino with sports betting on its Blue Square site, and London Clubs says it is still evaluating its options.
Meanwhile, smaller Internet specialists are gaining ground quickly.
Greg Feehely at Altium Securities said Leisure & Gamings acquisition of Stanleys online casino was a cheap way of gaining access to around 1 million customers.
"Theyve picked up access to a million customers at a very good price," he said. "We understand that over the years Stanley invested in its online casino more than four times what L&G paid for it," Feehely said.
Stanley declined to comment.
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