PricewaterhouseCoopers’ latest report on global gaming states that improved economic conditions are expected to trigger a recovery in US gaming revenues in late 2011 although 2007 levels will not return until the year after that. ‘Playing to win: The outlook for the global casino and online gaming market to 2014’ examines the future pace of economic recovery, new gaming destinations and gaming market evolution.

"The gaming industry is facing an evolution, which presents both challenges and opportunities for the industry's established players and those considering to enter the market," said Mary Lynn Palenik, director, gaming, entertainment, media & communications practice, PwC US. "The explosion of entertainment choices for consumers will make it vital for the industry to produce an offering and experience that consumers want to spend money on."

PwC suggests that total U.S. gaming revenues will increase to $68.3 billion in 2014 from $57.2 billion in 2009, a 3.6% compound annual increase, and that the US will remain the largest region in 2014. Asia Pacific will be the fastest growing region with a projected 23.6% increase compounded annually to $62.9 billion in 2014 from $21.8 billion in 2009. In Latin America, where spending growth on gambling in 2010 was the highest, rocketing 24.2%, PwC expects growth to be second highest globally, expanding an average 12.8% compounded annually over the next five years.

Tribal casinos and Nevada will show small compound annual increases to 2014, 2.7% and 4.1% respectively. PwC forecasts a bleak future for Atlantic City, a 3.2% compound annual decline because of increasing competitive pressure from regional casinos, with revenues not expected to pick up until 2013 but remaining well below their 2006 peak. Atlantic City will be the only market where revenues in 2014 will be lower than in 2009.

According to PwC, U.S. regulations of online gaming will continue to evolve, initially with the creation of the regulatory ‘walled gardens,’ where authorities in a particular territory seek to license, regulate, and tax online gaming between providers and players within their own borders, without allowing cross-border activity. By 2012-2013, growing momentum is expected to pool online gaming liquidity and align regulation across borders. For example, the potential Federal legalization of interstate online poker games in 2012-2013 will serve to legitimize the online gaming market in general, boost usage, and act as a catalyst for developments in other online gaming disciplines.

As different states' regulatory "walled gardens" for poker start to integrate and standardize, online betting on horse racing will expand beyond the states. The growth resulting from these trends will see a blend of new onshore and offshore providers enter the U.S. market. Social networking sites will be a key distribution platform for online gaming services, resulting in collaborative partnerships between gaming brands and social networks. Lotteries will also expand their reach and scale through interstate collaboration and online pooling, combined with new online offerings.

The data provided in the PwC report can be accessed at www.pwc.com under their Industry sector for Entertainment & media. (E-12.07.10)

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