NetGuide NZ - Is online gaming winning the pokies war?

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Is online gaming winning the pokies war?

The online gaming industry is growing fast and it is changing even faster. The amazing popularity of smartphones has led to a complete revolution in gaming and its effects are opening up whole new vistas for those who enjoy the occasional flutter.

The New Zealand gaming landscape has been synonymous with slot machine ‘pokies’ since anyone can remember (they first arrived in 1991), but the rise of online gaming is profoundly reshaping that landscape. The pokie is increasingly losing out to online offerings that are more dynamic, more engaging and potentially more lucrative - even though New Zealand only allows players to access sites that are based overseas.

That international qualification can cause problems as not all providers are able to trade in New Zealand dollars. However, that issue is clearly only a minor inconvenience. There are now a host of international brands such as 32Red, Betway and Sky Vegas which are well established across Oceania and which are keen to offer their wares to New Zealanders.

But the real impact is being felt at the hand held end of the market. It seems that punters are increasingly being drawn to the sort of quick-fix games that allow them to play on the move.

Offerings such as the 32Red mobile casino are highly tailored to what once would have been seen as a niche part of the market.

But even as gaming revenues are growing worldwide, the proportion of that activity that is transacted over mobile devices is rocketing.

A report by Business Wire Market analysts has predicted that as much as 40% of all online gambling activity will be mobile based by 2018. That equates to 100 million mobile users. Meanwhile, the revenues that pokies generate have been on the slide since 2004.

One perhaps surprising spin-off of this growth is the widespread provision of what would be ordinarily seen as casino offerings or card games but which do not involve real money. So-called social gaming is a growing phenomenon in its own right and while it is typically supported on the same digital infrastructure as cash games, it is seen by many as a completely different beast.

Social gaming allows players to enjoy the specific and instantly recognisable attractions of games such as poker or roulette. In the process the attractive qualities of the games themselves are highlighted irrespective of any financial implication. However, the phenomenon has got gaming industry insiders in a pickle.

While some see it as a way to promote what they might otherwise see as their core activity - providing cash games - there are others who insist that it should be left as a completely stand-alone provision.

There are sites that are economically viable on the basis of their advertising and so on, but which are otherwise cash-free environments.

Unsurprisingly the big money is to be seen in the sites that do provide for those who are prepared to play for real stakes. And what is provided for those players is an impressive array of interactive games, and some of the winnings that punters enjoy are equally impressive.

At the time of writing, for example, the 32Red site announces that last month’s biggest winner walked away with £290, 584 Sterling.

With that sort of return being offered it is not difficult to see why punters are leaving pokies behind for these online providers to get their kicks.

There is no doubt that New Zealanders like a gamble, just as there no question that digital and hand held devices are here to stay. Online providers are able to offer slots games that deliver precisely the same buzz as a traditional pokie as well as - and in addition to - a fully integrated range of casino and sports betting options.

From a New Zealand perspective, there are potential implications, given that for every dollar lost to a pokies machine an estimated 37 cents is redirected into sporting and community projects.

It is a scenario that government cannot ignore. Punters log into overseas sites and therefore do not make any contribution to NZ tax revenues. If current trends persist, the government could see billions of potential tax revenues disappear offshore.

It is widely believed that a legislative revolution will follow hot on the heels of the current technological one.

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