When an online gambling company decides to venture into new markets, it often relies on market research that is provided by some of the leading research firms across the world. The online gambling market in the United States shutdown in April 2011 after the infamous Black Friday scandal.
It took U.S State Legislators close to 3 years to amend their laws and permit online gambling in selective states and one of the factors that influenced their decision to reintroduce online gambling was because market research firms predicted that the U.S market was extremely lucrative and each state would be able to derive significant amounts of revenue based on taxes imposed on the online gambling industry.
Morgan Stanley was one of the top research firms that predicted a lucrative online gambling market in the U.S and initially estimated the market potential to reach $8 billion by 2020. During the last 18 months, Nevada, New Jersey and Delaware have legalized online poker but have witnessed a market slump.
Online gambling companies who have launched operations in these states have reported a lack of interest and player traffic. Ultimate Poker, the first online poker company to launch in Nevada has already shutdown its operations in both Nevada and New Jersey due to poor market conditions. Morgan Stanley issued a new estimate in 2014 and stated that the online gambling market had declined and would now be around $5 billion by 2020.
Online gambling companies in the United States have continued to report a drop in player traffic and overall revenue. Nevada and Delaware decided to join forces and launch a multi-state poker network that will allow both states to combine forces and bring their player pool together to create more competition and player interest. Morgan Stanley recently released another estimate confirming that the online gambling market in the U.S. has once again decline and is now expected to be around $2.7 billion by 2020.
Morgan Stanley released a statement which read
We continue to believe that there is a material runway for growth, but results have been disappointing. Legislative processes continue to be slow as lawmakers remain unconvinced that online gaming is currently worth the hassle for limited tax revenue.
Morgan Stanley believes that online poker will soon be legalized in a number of states including California, New York, Illinois and Pennsylvania. The company predicts that the market will recover in the next couple of years and expects a total of 15 U.S. states to legalize online gambling before 2020.