Does Online Poker Steal Business From Traditional Casinos?

by Lou on August 13, 2009

In a letter to members of the California Legislature, Robert H. Smith, Chairman of the California Tribal Business Alliance, a lobbying group representing seven member tribes, wrote:

“While there is no bill on the subject currently, we expect a proposal to surface shortly that will allow card clubs and California Indian tribes the exclusive right to operate an internet card game gambling web site.”

Smith goes on to say, “Card game gambling on the internet would take business away from brick and mortar casinos. Card clubs and casinos provide jobs and tax revenue for the local communities where they are located. Online wagering does not. The potential is there for the same kind of economic undercutting experienced by local retailers when online shopping becomes popular.”

He cuts to his version of the chase by saying, “Card game gambling on the internet would take business away from brick and mortar casinos.” But this argument, which has been employed so many times before, just never seems to pan out.

I don’t know anyone who plays online and chooses to do so rather than play in a live game. Most online players use the internet because they can play multiple tables simultaneously—in which case there’s no real competition between what’s offered online and in person; they’re really totally different products—or they play online because they have neither the large block of time required to drive to a casino, wait around for an open seat, play, and then drive home again, or they play online because they simply don’t live anywhere near a brick and mortar casino.

I’ve yet to hear anyone decide to forgo their annual vacation in Las Vegas because they’d rather stay home and play poker online. For many, live poker offers a social interaction that simply can’t be had in cyberspace, and for them, it makes live games preferable to playing online, regardless of how much multi-tabling they have to give up when playing live.

I understand that the tribes don’t want to lose their lucrative casino business, but to me, this is a false issue and a specious argument. In my opinion, just the opposite is true.

Playing online drives players who cut their poker teeth on the internet to traditional casinos. It doesn’t cause them to stay away because they chose to play cyberpoker instead. One doesn’t have to look any further than the phenomenal growth of the WSOP, a growth fueled by online players, to see that online poker and traditional casino poker help each other. They are not competing for the same dollar.

{ 7 comments }

Evets August 14, 2009 at 3:36 am

I for one am one of those players who never would have had the nerve to step in to a real casino and play poker if I hadn't practiced playing online. I would play in a live game more often if the nearest casino wasn't almost a 2 hour drive for me. I personally think that online poker only increases B&M casinos revenues because more of us who never would have gone to a casino are now willing to.

BigTPoker August 14, 2009 at 12:57 pm

I would tend to agree that playing online first might lead many people to seek out the real casinos.

But at the same time it seems logical that several people will not go to the casino as much, so the reasons you gave, or many more. This is pretty basic competition however: the online casinos are offering a better service.

The fact is that many of those people in real casinos may have never liked the place but never had an alternative before. If the casinos want to stay in business they'll simply have to improve their offering.

poker bot August 17, 2009 at 3:55 pm

Playing online poker from the comfort of your own home is something really nice.

Low Limit August 17, 2009 at 4:54 pm

I agree with you on this one. All evidence shows that the online option has only increased the traffic at the brick and mortar casinos. All those recent renovations at the Commerce and Bike here in Southern California sure weren't funded by Full Tilt poker. What would be a travesty is narrowing our online options to local Indian casinos when online poker is legalized.

Lola August 27, 2009 at 7:47 am

nice blog

poker rakeback September 6, 2009 at 6:09 pm

Online poker is the present and future of the gaming industry. Gambling is about making +ev decisions, and you can maximize your edge playing online poker. Instead of being dealt 30-40 hands per hour at a brick and mortar casino, you can multi-table 10 tables at once and play 500-1000 hands per hour.

If you play low-limit poker, the rake alone makes it nearly impossible to be successful at live poker, wheareas online poker sites give you some of that rake back to you. Online poker will continue to thrive, because it is far more profitable.

Madness222 September 10, 2009 at 10:00 am

Just what your article trying to discuss you can't control any online players for what they really want. For me am happy playing online casino.

Nice Article…

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