Why aren’t casinos more like airlines?

Historically, the airlines industry has gone through mergers and consolidations that have created some of the biggest airlines the world has ever seen. It couldn’t be avoided and everyone involved knew it. In the past few years the airlines industry has seen its share of consolidations that has kept the Federal Trade Commission busy making sure no anti-trust laws are broken. For example, when US Airways and American Airlines joined forces it created an $11 billion deal that created the world’s largest airline. Everything fell under the American Airlines name and it essentially beefed up their network, especially along the east coast of the US. Now between this massive new airline and it’s behemoth competitor United Continental, Delta Airlines including Southwest Airlines and between the both of them they account for 83% of the U.S. airline passengers throughout the whole country.

What does this mean for consumers?

As you could well imagine the logistics alone between coordinating all the intricacies of combining two massive airlines and all the employees, unions and computer systems; just making sure every runs smoothly is an amazing task. They both have major hubs and thousands of planes. The good thing is that they can combine to solve each other’s problems and make up for what was lacking in each other airlines. By merging the two airlines, it give them heft, strength and they will be able to go head to head with any large airline conglomerate like the Continental and Delta merger. A merger of this size also gives them double the routes in one fell swoop, which is good for the consumer. And it enables them to become profitable, especially with the cost of keeping the planes in the air and competitive pricing with the lower cost airlines.

Why should casinos do this?

With online gaming popularity increasing by the day in the US and land based casinos becoming more competitive with each other to get those gambling dollars from consumers, the large companies need to merge. For example, in the early 2000’s, Harrah’s bought Caesar’s and MGM bought Mandalay Bay but ever since then there has been little activity. But with online gaming getting popular, this is the time to do it. At this point in time, between online and land based, they are not taking advantage of the profits they could be making. With Nevada, New Jersey and Delaware legalizing online gaming, that means the European companies will be coming soon in with lots of new technology that has been in place across the pond for years and they can bring with then thousands of online players into their network.

Combining land and online hits the jackpot

Now combine new online technology with land-based casinos, you’ve got a recipe for both sharing liquidity and networks that would make for incredible critical mass and worldwide progressive jackpots that would give any gambler goose bumps. The real test will come if California legalizes online poker and gaming companies have access to over 38 million people. Then the reality will be that the large casino companies can no longer ignore online gaming even if they don’t want it. And, once online gaming becomes more mainstream in American culture and adoption rates become higher, the combination of the two will beckon the call of the mega mergers within the casino business. It may be years from now, but if the land based casino industry takes a chapter from the airline industry they will see that by building a network of both land based and online gaming companies, will make for a unified and stronger industry that will benefit everyone from shareholders, employees and consumers throughout the world.

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