The constant bad news being heard out of Las Vegas and Atlantic City led us to many conversations in recent weeks with offshore operators who echoed the reports from the major US gambling cities.

It has been a rough year for gaming companies throughout the world. As the global recession has hit even land-based gaming, sportsbooks, poker rooms and online casinos in the cyber world are also feeling the pinch. We spoke with many online gaming companies in the last few weeks who all verified that the downturn in gaming is not limited to Las Vegas, Atlantic City and Macau. The common thread is that handle, or total amount of wagers, is down. To this end, sportsbooks have seen their average bet size and average deposit shrink to about 60% of what it had been in previous years.

“A guy who deposited $500 last year is sending in $300 this year,” one operator told us. He went on to say, “The player whose average wager was $500 is now around $200. We even have former hundred or 200 dollar bettors that are now betting $50 parlays”.

Couple this with the fact that almost every book has seen their players winning at an unexpected rate and the outlook from many operators is bleak. One sportsbook recently responded that November was their worst ‘in-football month’ in many years. Of course, projections of sportsbook profits can never be 100% accurate, but the downturn in overall handle and a large percentage of players winning this football season has made even the largest sportsbook cut back on new ventures, software updates, advertising and mailings.

So the upside of not getting a barrage of junk offers for College Bowl season and the NFL playoffs and Super Bowl in your mailbox, may be offset by a struggling book whose profits are well below normal football season projections.

Still, the strong will survive. The ones we are worried about are smaller shops that have opened in the past two years. A sportsbook with only a couple of hundred players, may find that the challenges of the industry today are just too much too handle. When email responses from even the largest books all include the phrase, “It has been a rough year”, one has to wonder about the Bet33’s, BetSportsWeb’s and BetJoint’s of the world.

These factors have made us skeptical that many smaller bookmakers will outlast the curent perfect storm of higher costs, lower handle and winners. We recommend that any player who gambles with a small or newer outfit reduce their balances prior to the end of the NFL season. Here at OSGA we are hoping for the best, while planning for the worst. There will be extra operators on hand during February in anticipation of smaller shops inability to pay or, god forbid, walking out the door and going out-of-business.