A U.S. Department of Justice decision announced late last month has some L.A. businesses raising their bet that online poker will become legal in California this year.
The advisory decision stated that the government interprets the Interstate Wire Act of 1961 to only ban online wagering on sporting events. The decision was sought by the states of New York and Illinois, which want to offer their lotteries online, but it has resonated strongly in the poker industry, where it was interpreted to mean that efforts to create statewide online poker sites will not be opposed by the federal government.
“It takes away the risk that the federal government would step in,” said Jon Richmond, chief of executive of U.S. Digital Gaming, a Beverly Hills startup that owns online poker technology, and plans to operate the platforms for casinos and state lotteries. “The uncertainty had a chilling effect on states.”
Other potential beneficiaries in Los Angeles include card clubs, such as Commerce Casino, which banded together with dozens of American Indian tribes last year to create online poker platform CalShark. The platform does not offer real money games, but plans to start should legalization occur.
Big companies that want to enter the U.S. online poker market, such as Las Vegas casino operator MGM Resorts International and Isle of Man online poker technology company Playtech, saw share prices post double-digit increases early last week in response to the Justice Department’s decision.
The California Legislature is expected to evaluate an online poker bill sponsored by Sen. Correa, D-Santa Ana, this month that would allow certain parties, such as the consortium of card clubs and American Indian tribes, to apply for a license to run online poker platforms statewide.
Retail sales of physical and digital movies and TV shows declined again last year, as consumers continued to gravitate towards cheaper online and mail rentals.
That was the conclusion of a report released by IHS Inc., an Englewood, Colo., market research firm.
IHS estimated that U.S. consumers purchased about $9.9 billion of physical and digital video content last year, compared with a peak of $14.1 billion in 2004.
Still, the study noted, the studios aren’t conceding their profitable DVD and Blu-ray businesses without a fight.
All of the major studios except Walt Disney Co. are looking to boost packaged video sales by offering an added feature called UltraViolet, which allows a disc’s purchaser to also watch the film on an Android, Apple or Google TV device, and share the film with a handful of friends and family using a 12-digit code.
The studios, including Warner Bros., Paramount Pictures, 20th Century Fox and Sony Corp., are part of a consortium of media and technology companies called Digital Entertainment Content Ecosystem. Disney is working on its own digital feature.
UltraViolet debuted in October with the home video release of Warner Bros.’ “Horrible Bosses” and the service launched in the United Kingdom last week with the release of Warner Bros.’ “Final Destination 5.”
The consortium hasn’t released data about the uptake of digital viewing for the 17 or so movies that have included the feature, but analysts said consumer purchases haven’t been widely influenced by UltraViolet.
“Consumers don’t really know what it is,” said former Sony executive Scott Smyers, an analyst at Sunrise Digital Technologies in Campbell. “There’s going to be a learning curve.”
With last year’s domestic box office attendance falling to its lowest since 1995, the blame has largely fallen on lackluster content that led to numerous flops.
But Hollywood.com box office analyst Paul Dergarabedian believes higher ticket prices in conjunction with better home entertainment options are playing the biggest role in keeping audiences away.
“Price point may be the No. 1 issue right now,” he said.
As of November, the National Association of Theater Owners estimated that last year’s average ticket cost was $7.96: exceeding 2010’s previous high of $7.89.
In one of last year’s notable flops, Warner Bros.’ summer superhero release “Green Lantern” grossed just $116.7 million at the domestic box office as consumers balked at paying up to $4 extra to see the ill-received action film in 3-D.
Other add-ons, such as Imax, can often add $4 to a normal ticket price, while some exhibitor chains such as Kansas City’s AMC Entertainment Inc., Mo., charges a $4 premium to view films on its largest screens.
Especially troubling to Hollywood is the departure of male ticket-buyers under the age of 25. They didn’t show up in force for “Green Lantern,” but proved willing to shell out for other entertainment, such as video game “Call of Duty: Modern Warfare 3.” The title from Santa Monica’s Activision rung up more than $1 billion in sales in just over two weeks.
But Dergarabedian has a positive outlook for this year’s box office attendance, due to promising releases such as Warner Bros.’ next “Batman” installment and Lions Gate’s adaptation of the popular book “Hunger Games.” Should this year’s crop underperform as well, he said content for sure will not be to blame.
Staff reporter Jonathan Polakoff can be reached at email@example.com or (323)549-5225, ext. 226.
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