With little movement in regards to legalizing online gaming in the United States, Morgan Stanley has reduced the potential for future earnings from the activity within the states. The investment house of Wall Street issued a report sent to investors earlier in the week which showed that the early results from online gaming within the three states that offer the legalized option, Delaware, Nevada and New Jersey, have been unsatisfactory.
Gaming Analyst Thomas Allen reported for Morgan Stanley, stating the disappointing gaming results of the states with legalization combined with no additional states creating legislation this year have led to the drop in earning potential. According to Allen, there is a slim chance that other states will legalize online gaming within the year as well as stating an overall online gaming ban promoted by Sheldon Adelson also has little chance to pass into law.
Past projections by Morgan Stanley predicted that legalized online gaming within the United States would earn $5 billion in revenues by the year 2020. Allen is now reporting that the industry could go as high as $2.7 billion in the same time frame. This figure takes into account such states as Pennsylvania and California legalize online gaming, which is an action that Allen does not believe will take place in 2015.
In the report, Allen states: “We continue to believe that larger states ramping (up) should serve as a tipping point for other states.” With the three states that currently offer online gaming, only $134 million was earned in 2014, which was way below the estimated $678 million the company predicted. Allen says the low figures are due to several issues including payment processing problems, geo-location problems, absence of valuable advertising and illegal offshore online gaming.