Tew: Much Attrition - IGN's Take

Industry analyst Michael Tew probably went a little overboard with his doomsday projections for global I-gaming revenues.

He recently scaled back his numbers to estimate that this will be a $5.5 billion industry in 2010 rather than a $15 billion industry as he originally projected.

No one in his right mind would argue that the industry isn't in for a wallop but, scaling back by nearly 200 percent is a bit much.

I'm anxious to get my hands on estimates from other analysts, and it is my belief that they will not predict such a drastic change. But as long as none of the other experts are putting forth revised numbers, I offer my own little bit of number crunching.

For starters, the original projection of $15 billion in 2010 seems low. Most of Tew's contemporaries would argue that the industry is close to this plateau in 2006.

But let's assume $15 billion in '10 (prior to the U.S. crackdown) was an accurate estimate. Most observers would agree that the between 30 to 40 percent of the I-gaming market is U.S. based. So, if we conservatively say that the non-U.S. market is 60 percent of the total market, and we conservatively say that the industry (prior to the U.S. crackdown) was on pace to hit the $15 billion mark in 2010, even then cutting out the U.S. market translates to $9 billion in non-U.S. gambling. And this is assuming that 1) U.S. authorities can shut down 100 percent of U.S. online gambling activity, and 2) the non-U.S. online gambling market fails to grow over the next four years--both unrealistic scenarios.

I realize that Mr. Tew knows more about projecting revenues then I'll ever know, and I'm sure that I'm overlooking important factors that he took into consideration, but I simply cannot imagine--given people's propensity to gambling--that I-gaming will shrink to a $5.5 billion industry by 2010.