According to a recent study performed by PayPoint.net, 81% of people who gamble online are concerned over security. The study was reported by eGaming Review, which also stated that “61% expressed concern about what options are available to them if they encounter a problem gambling online.” It’s easy to understand why consumers who gamble online would have cause for concern: in the United States and several other countries worldwide, the transfer of funds from players to internet gambling sites is explicitly against the law. In order to do so, players must go through a variety of hoops.
In light of a recent report by Forbes Magazine stating that funds belonging to the online poker room and sports book Bodog had been seized from four major U.S. banks, customers have also questioned their ability to cash out. The study report states, “40% of respondents expressed concern over security around the payment of winnings.” Bodog later stated that the funds in question were not directly tied to its own payment processors and that its players’ money was indeed safe.
Still, 81% of customers being worried about security concerns is alarming. When the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed back in the fall of 2006, it sent shockwaves through the industry. PartyPoker and Pacific Poker, two of the largest online poker rooms at the time of the UIGEA’s passage, abandoned the U.S. market. Both companies are publicly traded (as PartyGaming and 888, respectively) and the move was done to protect shareholder interests.
Shortly thereafter, Neteller – the major e-wallet at the time – left the U.S. market. In the process, many customers had their assets frozen in Neteller’s system, leading to a cavalcade of ill will towards the company by customers in the United States. Since Neteller’s departure, other payment processors have left the market, including ePassporte and CLICK2PAY. Many credit cards companies will not allow internet gambling transactions to be processed.
In essence, because of the flux of the industry in the United States and across the world, it’s easy to see why customers would be wary of depositing online. Only a handful of online poker sites continue to accept U.S. players – PokerStars, Ultimate Bet, Full Tilt Poker, and Absolute Poker, just to name a few. Sites like Titan Poker, Mansion Poker, PokerRoom, and Party Poker continue to exclude U.S. players.
As a result, poker participating in the United States has slumped, according to the American Gaming Association’s 2008 State of the States survey. In 2004 and 2005, 18% of adults stated that they had played poker during the past year. In 2006, that number dropped to 14%. In 2007, it sank to 13%. The drop from 2005 to 2008 represents a decrease of 28%.
Even the popularity of live poker has struggled. Consumer spending on poker in Nevada and New Jersey grew by 15% between 2005 and 2006. Between 2006 and 2007, it grew by just 5.9%. The poker boom as we know it began in 2003 with Chris Moneymaker’s win in the World Series of Poker Main Event.
