In-flight Entertainment
Wednesday, October 19, 2005

In-flight Gambling

We talked about it earlier in the October news tidbits when the World Poker Exchange partnered with US Airways.

Now we hear that Ryanair plans for an online casino by Christmas 2005.

The airline has revealed that it is now set to launch an online casino that will operate in tandem with a new in-flight entertainment service. The facility is designed to give a further boost to the airline's fast-growing ancillary revenues. Plans are at an advanced stage to launch the virtual casino before Christmas...

Ryanair is Europe's biggest budget airline. Based in Ireland and founded in 1985 by Irish businessman Tony Ryan, the company's chief competitor is easyJet.

Their CEO was on record in 2004, wishing for top-margin IFE.

Chief Executive Michael O'Leary said the usual government restrictions on European land-bound gambling operations were unlikely to apply in the air.

"I don't know who would stop you. It is like duty-free; you are in international waters," he told reporters.

While it is some time away, O'Leary said the technology does exist to adapt the airline's new in-flight entertainment systems for the use of gambling with credit cards. He described the revenue potential as "enormous".

Your day has almost come, Ryanair investors. Congratulations.

Update 1 - Some facts, courtesy of this report.

Inflight gambling.. is currently being offered by Swissair and a few other airlines. The U.S. Transportation department says inflight gambling could generate $480 million a year for international airlines. However, gambling is currently banned on U.S. airlines and international carrier flights traveling in and out of the U.S. The tremendous profit potential makes it likely that U.S. carriers will lobby for legalization.

Update 2 - eFlyte made a big splash at WAEA, announcing their new in-flight entertainment gambling systems for commercial aircraft.

eFlyte intends to provide airline passengers a fun, challenging way to pass time on long flights, with the added bonus of accumulating winnings while relaxing at 35,000 feet. The system will have strict player controls, with access by the swipe of a credit card which will be credited or debited in the same way as any other credit card transaction. Continued Morgan, "The idea is to provide airline passengers with a low-stakes gambling environment that will co-exist with movies, audio tracks and even our own casual games."

Update 3 - It seems that every news source in the world was quoting a blurb from Ryanair Chief Executive Michael O'Leary last week, where he predicted that "revenue from inflight gaming and gambling could eventually do away with the need to charge air fares." What rubbish!

Media outlets who picked up this little huge press stunt include USA Today - Ryanair says all may fly free if gambling pays off and MSNBC - Airlines: Ryanair's Gamble, by Martin Stabe.

Results released last week show that Ryanair's "ancillary revenues" grew by 40 percent, to 129 million euros, in the six months ending in September, and now account for 14 percent of all revenue. Currently, the airline earns extra cash from commissions on hotel and rental-car reservations and by selling advertising space on its aircraft.

Will passengers spend their travel time playing slot, blackjack and poker machines? Some analysts are skeptical, given that earlier this year the airline scrapped plans for charging passengers for television consoles due to lack of interest. "The low-cost sector in Europe has developed in a way that you don't get anything for free," says Andrew Lobbenberg, an ABN AMRO analyst in London. Ryanair chief financial officer Howard Millar defends the company's novel approach: "You don't have to buy a drink onboard, you don't have to gamble, you don't have to take a car rental from us; it's all entirely discretionary."
Not going to last very long. First of all, whilst the duty-free argument will probably stand up and nobody is going to be able to stop them doing it, the truth of the matter is that there is going to be a customer backlash to this.

Yes, they have a captive (almost literally!) audience, a small percentage of which may be interested in playing a little poker or blackjack, but the cost of providing this service in contrast to realistic revenues means that this will get dropped inside of 12 months, in my opinion.

I mean, come on - I love a hand of poker from time to time as much as the next guy, but do I really want to get stuck into a game whilst in a noisy, hot, cramped airplane seat with some guy sat next to me telling me all about his bad beats? Nah, can't see it. I'd pass over it. Plus, I really don't like the idea, no matter how good the crypography is, that my credit card details could be bouncing off satellites or around an airline's data network.
Flying RyanAir is already a gamble...

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