Goldman Sachs Predicts Good Times Ahead

Global investment banking and securities firm Goldman Sachs has predicted that online gambling will soon be legalised and regulated in the US despite the slow progress of Congressman Barney Frank’s proposed Internet Gambling Regulation, Consumer Protection And Enforcement Act.

In a recent note to investors, the New York firm stated that it is ‘logical to assume that the US market will eventually regulate given the potential implications for US tax take if nothing else’.

“Based on a simple ‘grossing up’ of PartyGaming’s rake relative to its nine percent market share, the US poker market alone was worth $1.5 billion in 2008,” read the investment advice.

“Were the market to be legalised, we believe that the size of the revenue opportunity could increase materially. Based on an assumption of 30 percent penetration of offline poker players and $300 gross gaming revenue per player, we estimate that a legal poker market could be worth three billion dollars a year.

“Were gross gaming revenue to increase to 45 percent and gross gaming revenue per player rise to $400, the size of the poker market alone could be worth six billion dollars. We also estimate that the casino market could expand to a similar scale based on various offline penetration assumptions.

“The momentum at state level, where widening state budget deficits are ratcheting up financial pressures, is clearly building. Indeed, if California and Florida move forward with legislation to legalise online poker, this could prove the catalyst for other states to follow suit.”