Casinos Get Excited About Online Gaming

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Casino companies are finally starting to see online gaming as a possible growth engine for the industry and are hoping for congressional help. The American Gaming Association, which is the lobbying arm of the casino industry, is in communication with members of Congress about the four different bills floating through the House and Senate.

This has become an urgent matter for the industry as the November elections draw near. The elections will likely result in a more conservative Congress that is less friendly to legalizing online gambling, so the time is now for action.

This is a big deal for the industry as domestic markets like Las Vegas struggle and companies like MGM Resorts (NYSE: MGM  ) wrestle with high debt levels. It doesn't look as if Las Vegas will provide growth for some time, so online gaming is the best option. The advantages are clear: low start-up costs, high margins, high growth potential; it's everything a company dreams of.

Las Vegas Sands (NYSE: LVS  ) has already explored online gaming, but the real winners could be operators with more variety to offer. Harrah's and MGM Resorts have more than a dozen properties each scattered throughout the country. A variety of rewards, which is a major differentiator in online gaming, could be offered, hopefully bringing gamblers into both the online casino and the brick-and-mortar casino.

But not just the big operators will join in; I wouldn't be surprised to see smaller operators benefit from online gaming as well. Some online players have no interest in Las Vegas-centric perks, and Boyd Gaming (NYSE: BYD  ) and Ameristar Casinos (Nasdaq: ASCA  ) both have casinos throughout the country. Local perks that Las Vegas Sands or Wynn Resorts (Nasdaq: WYNN  ) can't offer in Las Vegas could lure online players in these other markets.

I'll be watching the progress of online gaming bills in Congress. This could be a big win for the casino industry if it's able to get the legislation right.

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Fool contributor Travis Hoium owns shares of LVS and has sold covered calls on LVS. Ameristar Casinos is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

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  • Report this Comment On November 09, 2010, at 12:26 PM, patricklee2010 wrote:

    When one of the casino companies launch the first <a href=>online casino</a> portal in the history of gambling, they found out that it was a success because when it was launched there have been a massive group of individual who like and support it and until now it is still inviting a lot of people to try and experience the online gambling world.

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