Stock Markets and Casinos Meld

Online gambling takes another step towards being legal, and Elray Gaming is ready.

Image: Photosani/Shutterstock

Stock market/casino comparisons have been around for a while now. And with such a common verbiage, it’s no wonder: All or none, bid, blue chips, book, buy-in, risk, hedge, spread, and split are all terms that could be heard in either location.

Until now, gambling laws have stood as the final barrier separating the two businesses, but a Justice Department ruling last month has begun a process that could possibly end in legalizing online gambling, and one company, Elray Gaming, is already making preparations to take advantage of the continued blurring of the stock market/casino lines by creating “fantasy” stock market and forex applications.

"It is inevitable that online gaming in the USA will be allowed in certain States, and this will not only be a positive result for Elray, but for the gaming community as a whole," said Elray CEO Brian Goodman.

The Justice Department decision does not exactly legalize state-by-state online gambling, says Goodman, who is based in Australia, because it is still illegal for a bank to conduct any online gaming transactions. What it does do is open up the door to such legalizing without actually giving the law any teeth.

At the moment, Elray’s games are of the sweepstakes type that offer rewards for playing and do not charge users to participate. Those who do pay for subscriptions do not earn any sort of competitive advantage over those who play for free.

Although unwilling to go into details regarding Elray’s deal with an unnamed “financial service partner,” Goodman did explain about how the games will operate.

Since sweepstakes games cannot demand payment to play, players start off playing for free. In the example Goodman gave, of a foreign-exchange game, players learn how to make money by following rules similar to an actual foreign exchange and, depending on their success, may win various prizes. Players who particularly enjoy the foreign-exchange game may purchase a subscription, and if they start to really have fun, the “financial service partner” will likely get involved.

Elray’s unnamed financial service partner is a “real brokerage house” licensed to exchange real currency, and in exchange for providing the platform and technical support, the firm gains access to Elray’s database—a boon of informed, committed, potential customers.

Last week Reuters reported that the global online casino market is now worth $35 billion, $5 billion to $6 billion of which comes from the United States, virtually all of which now flows overseas.

“People are betting anyway through overseas locations,” said Goodman. “The sooner they legalize it they can tax it and keep that money within the United States.”

For now, the stock market and the casino still have a few fragile barriers keeping them distinct. If Goodman is right though, it won’t be that way for long, and in the meantime, sweepstakes games are still perfectly legal.