After years of shockingly explosive growth in the offshore gambling industry, 2007 saw a sharp downturn. The Unlawful Internet Gambling Enforcement Act (UIGEA), passed late in 2006, crippled the financial underpinnings of the industry by hampering the flow of money to and from online bookies and poker rooms. Consolidations, closings, and withdrawals from the U.S. market changed the face of online gambling.
Now that the dust has settled, the online sportsbook industry must reinvent itself to stay competitive. The old ways of doing business will no longer be sufficient now that the rules have changed. What follows is my personal "wish list" of changes I hope to see in the online gambling industry in 2008. Increased use of book-to-book transfers and account-to-account transfers.
I understand some of the reasons books don't want to transfer money between themselves, but the hassles of offshore processing have become outrageous. While there are enough workarounds to transfer small amounts, large deposits are still extremely difficult. If money was easier to move between sportsbooks, it would eliminate a lot of the bottlenecks caused by the U.S. banking system. Undoubtedly, upper management at most sportsbooks would view such a policy as helping the competition, and with the high player acquisition costs involved in offshore, enabling your clients to easily access your competitors might seem on the surface to be counterproductive. But sportsbooks need to realize that most players do indeed use multiple "outs", a fact that will never change, and accommodating the needs of your customers should come first. Inter-book transfers could be a win-win situation, easing the hassles on the players and saving the sportsbooks significant amounts on processing fees. A resolution to the U.S. legal situation.
The final WTO decision in the Antigua v. U..S case was, to put it mildly, disappointing. Barney Frank's bill and similar legislation has largely lost momentum and seems very unlikely to have any substantial impact. Unfortunately, the likelihood of having any significant improvement in the U.S. legal climate seems very doubtful for the immediate future, meaning continued hassles for the sportsbook industry. It will be difficult for the industry to make any significant strides forward while the specter of U.S. prosecutions hangs over all involved. Expanded mixed martial arts betting.
The success of the Ultimate Fighting Championship in reinventing itself over the past few years has been astounding. Whether that interest continues is, of course, debatable. Nonetheless, this is one area where bookmakers have failed to keep up with demand. While odds on the headline fights are posted weeks, if not months in advance, they are generally only offered at micro limits, with no real action being welcome until the few days preceding an event. The undercards are even worse, with few shops bothering to put odds up on these matches at all until a day or two before the fights. Mixed martial arts fans are largely young and tech-savvy, a group who should easily make the transition into online wagering. The fact that the UFC has essentially endorsed wagering on its events is even more reason to expand betting opportunities. Few sportsbooks even offer totals on UFC events, never mind proposition wagering, an avenue perfect for UFC with the numerous outcomes that can occur in the Octagon. Pinnacle back online for U.S. bettors.
Well, I'm allowed to dream, aren't I? Barring a tremendous shift in the U.S. legal climate, Pinnacle's return seems extremely unlikely. Yet it is shocking that no one else has stepped in to fill the niche market that Pinnacle dominated for so many years. Until someone else has the talent and desire to step into those shoes, U.S. bettors will continue to suffer. More bookmakers with cojones.
Recent posts on the MajorWager forums indicate a level of dissatisfaction with current online offerings. One thread lamented the lack of soccer wagering options, while the mixed martial arts offerings have also been subpar as noted above. Fewer books are willing to offer unique propositions nowadays, and those that do keep the limits small. Reduced-juice betting, at one point seeming to become the norm, has become rarer and rarer. In-game betting is another once-promising gimmick that has largely fallen by the wayside. Surprisingly, more and more bookmakers seem scared to take a bet, at least for any significant amount of money, which makes one wonder why they are in this business to begin with. No one seems to want to put up a line until someone else has. This copycat attitude is terrible for the industry, and the entire industry will stagnate unless more books are willing to step out and offer fresh betting options.
The bottom line is that the industry has changed dramatically in the past 18 months, and not for the better. 2007 saw bookmakers struggle, as the old model of "vanilla" betting lines and cash bonuses as the primary driver of customer acquisition have become ineffective. The offshore industry is entering a second, more challenging stage in its evolution, and innovation will be key in determining the leaders in this newly competitive era. Sportsbooks will need to become more "customer-centric" to attract and retain players. Those bookmakers who are unable to adapt to the present (and future) environment will find making money in 2008 to be a much more difficult proposition than in the past.
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