Industry studies about Internet gambling are surfacing daily reporting on who’s gambling online, types of wagering offered, Internet technology, wagering jurisdictions and legal issues. Home Gambling Network, Inc. (HGN) of Las Vegas commenced compiling participatory data from online gamblers in 1997 through its online survey1and is pleased to be able to share this information with the EASG attendants.

HGN‘s online survey asked people who are looking to gamble online to disclose what they expect from a remote wageringTM operator in hopes to shed light on the very nature of the bourgeoning Industry. It was necessary to determine the trends of technology used by these individuals seeking to gamble online, their age, gender, occupation, disposable income, jurisdiction, number of users per household and game and payment preferences.

This data, in which will be updated and issued annually, was compiled through January 2000 and published earlier this year in an two issue report written for Casino International offering insight as to who the players are and what they expect once they decide to play with an online casino. As with any good customer orientated business, customer service and supply to the people’s demands is a must; both of which are easily accomplished by knowing the customer’s needs. Land based wagering entities looking to enter the Internet gambling market have begun offering surveys to their customers in order to determine their preferences for entrance into the remote wageringTM arena.

Information compiled during the past three years (1997-1999) indicated that the majority of people surveyed in 1997 reported using 14.4 and 28.8 modems with a gradual increase in use of 33.3 and especially 56K modems into late 1998. This trend was to be expected as the Industry standard for new computers in 1998-1999 included 56K modems.

The usage of broadband services such as ISDN (Integrated Services Digital Network) and Cable Modem (broadband access supplied by the individual’s local cable company) increased towards late 1998 well into 1999 with no reported use of ADSL (Asymmetrical Digital Subscriber Line) whatsoever. This doesn’t mean that there aren’t any ADSL users but merely that no gamblers using ADSL filled out the survey. This usage, along with that of all broadband technologies to include wireless and 2-way satellite, will change. Just as what we saw with 56K modems, broadband technologies are becoming readily available throughout the world. For example, Europe is expecting 27 million broadband subscribers by 20052 whereas the US expects to reach 25 million by 20033 alone. With the increase in wireless broadband capabilities, remote wageringTM operators will experience a dramatic increase in not only remote sports wagering but also other live wagered events such as blackjack and bingo.

For those who followed the Internet browser war between Microsoft and Netscape, 60% of the survey participants by January 2000 were using Netscape compared to 26% who were using Microsoft's Internet Explorer (IE) while the last 14% claimed to be using "other". Actual browser usage has greatly shifted in favor of Microsoft’s IE as of mid 2000 with Microsoft’s dominating 86 percent of the browser market compared to a combined other, which includes Netscape, of 14 percent. It is expected that this browser usage shift will most definitely filter into HGN’s surveys. Microsoft Operating System (OS), on the other hand, dominated the users operating system category with 83% of the surveys reflecting the use of Windows as their OS. WebTV users estimated 9% while Mac and "other" OS's totaled 8%. Through various comments made on the survey’s such as one made by a gambler from Phoenix, Arizona USA, "No present online site address’ the Macintosh community." With a resurging increase of Apple Macintosh users throughout the world, this is a technological area that that needs to be addressed in order to tap into this portion of the remote wageringTM market.

What can we say about these gamblers? At the time this research was published, MSNBC statistics for gamblers between the ages of 26-34 and 35-44 ranked similar to HGN’s survey with 68% of HGN’s survey participants between the age of 26-50. There was a sizable number of participants aged 21-25, 51-55 and 56+ but together, these age groups accounted for only 32% of the total survey participants. I am pleased to report that there were no participants aged 0-17 years of age which should make some of our politicians sleep more soundly.

Sebastian Sinclair of CCA, Inc. had reported earlier in the year that North America accounted for 67% of Internet gambling consumers while HGN’s surveys reflected 78% for the USA alone. When combining the survey participants of the USA and Canada, it was estimated that nearly 84% of the Internet gambling market was coming from North America leaving 16% for the remaining world population. At the time this data was released, North America accounted for an estimated 56% of the world online population4 which was approximated at 250+ million online users. A recent dramatic increase in European, Asian and Latin American Internet usage leaves North America accounting for only 44% of the total 330+ million online users which leads us to believe that 2001’s data will reflect this user increase in favor of European and Asian gamblers.

Ironically for the reluctance of land based operators to get involved in remote wageringTM, online usage soared to 332+ millions users5 with Nua Survey’s published statistics showing that there are currently 34 million Internet gamblers with an estimated increase to 43 million worldwide by 2001. If these numbers are correct, approximately 10% of the total online world population currently takes part in some form of remote wageringTM.

It will be interesting to see the breakdown of gamblers in the North American market, specifically in the USA state by state, from the perspective of those wagering entities who are currently taking US wagers. HGN's survey's indicated California residents as the most active seekers of Internet gambling with residents of Florida and Texas next in line. New York ranked behind these­ and Michigan combined.

What is at stake for land based gambling establishments from around the tri-California state region is the emergence of Native American’s entrance into the online California market. With 33+ million residents, licensed wagering entities in California, Nevada and all other neighboring states have something to fear, loss of their customers to a more convenient form of wagering.

January 2000 saw the release of Bear Stearns’ report on Internet gambling heralding the Internet gambling industry as a money making venture for both operator and investor alike. It was not long before that a similar positive projection was made about Internet gambling revenues by Lily Kwong, Australian based gaming stock analyst of the Deutsche Bundesbank.

With gambling services that are licensed by jurisdictions known for quality regulation and sound reputations, the Internet gambling industry is pioneering the way in which legal gambling entertainment is conducted as well as flourishing into a better investment for both operator and investor alike. With relatively low overhead and start-up costs compared to it’s brick and mortar cousin and an understanding of today’s ‘on the go’ gambler, the industry is looking at potential revenues of approximately $3.2 billion projected by 2001 which is up from $2.3 billion estimated for 20006. Not shabby for an Industry that anti-gambling groups around the globe are trying to destroy while the pro-gambling public and investment institutions are financially supporting.

In operating a successful online operation, the rules that apply to land based wagering also apply to the Internet…the customer is king! As the customer is the demand, your service is the supply. Reflecting insight into people looking to gamble online, HGN has discovered one of the most crucial statistics besides game choice by survey respondents indicating the Internet gambler's payment preference. Visa was the undisputed payment choice at 62% with Master Card trailing a far distant second at 15%. American Express came in at 9%, Discover at 2%, Debit Card at 1% and "other" totaled 11%. This is a clear indication that people looking to gamble over the Internet are not afraid of using their credit card to conduct electronic transactions as others report. We also anticipate “other” forms of electronic payment usage to increase but believe that this will still be fueled by the 3 major card issuers.

Game choices were not too surprising with a spectrum of games sought by people looking to gamble remotely. With compiling and averaging survey respondent’s three game choices, surveys indicated 54% preferred to play live Black Jack while 43% indicate their preference for live Poker. It was appropriate to see 40% indicated their preference in playing Slots as 19% asked for live Craps, 18% sought after live Roulette, 17% for live Bingo and 11% for live Keno. With the increase in demand for State Lotteries, it was surprising that only 2% of HGN’s survey respondents sought to buy lottery tickets online. In retrospect of the survey, one may make the assumption that people looking to gamble over the Internet aren’t necessarily looking to buy a lottery ticket or are they waiting for their favorite State/Country Lottery to go online?

Come September 2000, it is fantastic to see the reported exponential growth in demand for remote sports wagering as only 7% of HGN’s survey respondents sought to conduct any sports related wagering as of January 2000. As the increase in wireless technology enables remote gamblers to access their favorite sportsbook and by the huge investment made by name brand wagering entities, this should actually surpass casino style games until, we believe, the live casino style game environment is introduced. When this happens, 5% of HGN’s surveyed gamblers indicated Baccarrat, 2% for Pai Gow and 0.4% for Dice, Sic Bo and War respectively. With the introduction of live remote wageringTM, our belief is that demand for these and other traditional and non-traditional games will rapidly increase.

Along with discerning what types of wagering online gamblers sought, comments were requested and common questions ranged from "What online casinos offer non-generated rolls for craps?" by a Pinon, Arizona USA gambler to "I currently play Bridge online-why not live Poker?" by a Nashville, Tennessee USA gambler. Many comments were given to include: "I’m looking for easily accessible and user friendly gambling online." Coming from Austelle, Georgia USA, "I like to play Bingo for cash prizes but am not in the position to pay high dollar stakes at this time." From Arlington, Texas USA, "Speed of payment is most important..." from California, Maryland USA and "Let me know when it starts!" from High Wycombe, Bucks UK to name a few. What was surprising was the lack of comments and/or questions posed by gamblers outside of the US.

With the growth in online users worldwide to approximately 332.73 million people according to Nua Surveys6, the growth in persons looking to enjoy online entertainment such as gambling will increase accordingly. With over $3.2 billion at stake for 2001, can you afford to miss out this year?

Author biography: deedee Molnick, Chief Executive Officer of i2corp.com/Home Gambling Network, Inc. (HGN), oversees the development and roll out of new intellectual property, and is responsible for the day-to-day operations of publicly traded i2corp.com under OTCBB: ITOO and its subsidiaries, Home Gambling Network, Inc. (HGN), i2consult.com, Inc., and i2develop.com, Inc. Molnick co-founded HGN in 1995 and presided over it until Spring 2000. During that time, she marketed and lobbied the company’s patented method of remote wagering on live games and events utilizing electronic transactions. Molnick is a recognized expert in Internet Gaming and is a regular columnist in various gaming publications, including Indian Gaming and Casino International.

References:

(1) Home Gambling Network’s online survey can be found at Http://www.homegamblingnetwork.com/player_survey.php3
(2) Data according to Forrester and published by NUA located at http://www.nua.ie
(3) Data according to eMarketer's “The Business of Broadband”™ located at http://www.emarketer.com
(4) Estimated online activity can be found at NUA which is located at http://www.nua.ie/surveys/how_many_online/index.html
(5) NUA’s June 2000 estimated World Total online usage.
(6) Estimated online activity can be found at NUA which is located at http://www.nua.ie/surveys/how_many_online/index.html

Note: All names and trademarks listed in this paper are property of Home Gambling Network, Inc. This includes: Home Gambling Network, Inc., HGN and remote wagering. Paper: Ó 2000 Home Gambling Network, Inc.