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TheStreet Open House

Casinos Will Win the Online Gaming Battle

Stocks in this article: MGMCZRWYNNLVS

NEW YORK (TheStreet) -- While the moral debate continues to rage on, the fact is that online gambling is gaining traction in the United States.

This week, New Jersey joined Nevada and Delaware as the only states with legalized online gambling, and is certainly the biggest in terms of population. 

While one additional state is not earth-shattering, it could really begin to turn the tide in the gambling universe if it proves to be a success. 

If the New Jersey experience goes well, more states will likely start to legalize online gambling even though many political leaders claim to be focused on their moral compass, with their biggest concern being addiction problems. 

However, that hasn't stopped them from allowing the public to legally drink alcohol, smoke cigarettes or buy scratch-off lottery tickets, so my guess is that it ultimately won't stymie the nationwide legalization of online gambling, especially when considering the expected revenue. 

If the shift to online gambling eventually moves forward, will that spell the end to Atlantic City, Las Vegas and other physical casino buildings and resorts? I have my doubts. Many people don't go to Vegas just to get their gambling fix. They go for the ambiance with friends and family, or sometimes it's for business, events and seminars. 

Ultimately, the casinos will likely be the biggest winners. For now, online gambling Web sites have to operate through casinos. That may or may not change in the future, but it's a good sign for the casinos that have been slowly bleeding out. 

Revenue at Atlantic City is off some 40% from its peak in 2006, meaning the successful move to online gambling is all the more important. 

The biggest dilemma it faces is the tough regulation, with concerns over age restrictions and addiction issues. Aside from balancing out the revenue streams with the obvious problem that gambling can ruin some people's lives, politicians have to decide whether it's fair for a majority of the population to be held back from something because a minority of people can't control it. 

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