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article imageOp-Ed: The multiple threats facing the online gambling industry

By Robert Lawson     Jul 15, 2015 in Business
Online gaming faces extraordinary obstacles making their way into a profitable industry in gaming because of a multitude of threats.
There are several threats facing the online gambling industry internationally that could disrupt its profitability, but more importantly its viability as an industry at all. The heavily regulated and highly controversial online gambling industry probably has more enemies than any other disruptive digital industry in the 21st century. They face enemies from hackers, regulators, tax agencies and the established brick-and-mortar casinos.
Hackers
Hackers are a tremendous threat to everyday society and legitimate business, but online gambling operations are at a particularly higher risk due to the fact that their businesses run so many transactions on accounts that can be compromised. In early July, four online casino operations, part of Atlantic City, were hit with distributed denial of service (DDoS) attacks, according to news reports coming from Trenton. Their servers were flooded with traffic by a hacker or group of hackers demanding ransom paid in BitCoin.
The attack on the New Jersey-based online casinos lasted from July 4 to July 5, according to the report. In some instances, foreign governments are thought to be involved in hacking against casino operations. Federal authorities in the United States believe Iran was behind attacks on casinos in Las Vegas, Nevada in 2014.
Regulators
Online casinos also have to worry about their own governments and politicians seeking to ban them entirely. Their reputations and risks are perfect vulnerabilities (even liabilities) for reformists looking to gain political momentum or those whose constituents are brick-and-mortar competitors (even some who may seek to establish their own digital casinos). Those entering the market need to be completely prepared and ready for both damage control and security protocols because with so many potential threats to business, an operation can sink quickly.
In America, the Sheldon Adelson-backed online gaming ban called RAWA is a hot topic in the gaming world. Banning online gaming altogether could be an issue with unintended consequences even for the established brick-and-mortar casinos out there, according to American Gaming Association (AGA) President Geoff Freeman. Freeman was cited saying that federal legislation is often written poorly and could be detrimental to all gaming businesses.
The Tax Man
Taxes are another issue for online gaming, as it is for many other industries. Gaming industries are another attractive target for tax legislation and political reform (or simply for fundraising purposes during budget shortfalls). This threat can at least be planned for and will not entirely kill sites like Teddy Sagi’s online casino and other sites impacted by tax reform in European countries like the UK. New tax laws are being introduced for online gaming in that country, according to reports.
Established Brick-and-Mortar Casinos
The regular casinos are wary of disruptive competition coming digital players just as many other industries are keeping their eyes peeled. At the same time, like the casinos regulated under New Jersey law for Atlantic City, the established players also see an opportunity in the digital frontier. This is evidenced by the comments made by the AGA president Geoff Freeman in July.
The digital frontier is a game changer, but online gaming faces an uphill battle with enemies on all sides firing shots in an attempt to derail their progress in making in-roads in a regulated vice economy.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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