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Morgan Stanley has slashed its estimate of U.S. Internet gambling growth by the year 2020 almost in half, as its new revenue figures for the end of this decade in the regulated U.S. market are expected to reach $2.7 billion.

A previous report issued in September predicted that revenue total to be $5.2 billion by 2020. Proponents of regulated online poker and gambling are likely hoping that the new estimate by the leading financial services company is an April Fool’s joke. It certainly is not, as regulation has been at a virtual standstill since the launches of igaming regimes in Nevada, Delaware and New Jersey in 2013.

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iGaming Revenue Forcecasted Down

Analyzing the latest estimates in another perspective, Morgan Stanley’s prediction prior to last September’s report had legalized U.S. igaming as an $8 billion industry by 2020. The dollars seen in the highly-respected firm’s crystal ball continue to decrease as time marches on.

15 States by 2020

Also diminished in the Morgan Stanley estimate is the number of states that will be legally operating ipoker and gambling sites in 2020. The new estimate is 15, down from the 20 predicted six months ago, the Associated Press reported.

The latest forecast shows another adjustment as well, deleting California from the list of states that will enact online gaming legislation in 2015. That list is now barren, as a second consecutive year will go by without any new states joining the triumverate that launched in 2013, says Morgan Stanley.


Bearish on iGaming in 2015

California will, however, get over the hump within a few years, according to the report – along with Pennsylvania, Illinois and New York. The First State has made considerable progress with regard to igaming legislation as of late, while New York is in the midst of land-based gambling expansion and may eventually follow that up by approving Internet gaming legislation.

Teething Problems in Market’s Infancy

Still plaguing the U.S. industry, per the financial services firm, are issues related to making sure that gamblers are within legalized states, as well as financial institutions that are hesitant to acknowledge the legality of deposits via credit card. New Jersey will soon implement a credit card code that will likely take care of the latter issue, while geolocation technology reportedly continues to improve.

Also cited as reasons that hinder growth are inadequate marketing by the regulated gaming sites and casinos, and an unregulated market that continues to prosper. U.S. players who have not relocated abroad continue to access offshore poker and gambling sites, several of which have made rapid withdrawals a backbone of their operation.

The Rawa Effect

One bright spot to the report is that Morgan Stanley does not believe that the Restoration of America’s Wire Act (RAWA) will ever be approved by lawmakers. The bill that aims to wipe out online gambling in the U.S. was the subject of a subcommittee hearing last week.

“While the bill may advance out of committee, we believe it faces long odds of passing, especially without carve-outs for online lotteries and existing online gaming states,” stated the Morgan Stanley report.

Charles Rettmuller

Charles has been an avid poker player for a number of years, both live and online. He holds a degree in journalism and previously worked as a reporter for a Chicago-based newspaper. Charles joined the PokerUpdate team in early 2012 and writes daily news articles for the site.