I've worked for a very large online gambling company for a couple of years, and I wrote this during my last week employed by one. This was in response to someone commenting about the fact that they have an IT job at a land based casino in Vegas and really shouldn't be in that job because they don't know what they are doing, but get paid fairly well anyway.
think this kind of thing is normal in the industry. First you have an
industry where many land based casinos have little competition because
of license restrictions making it hard for new entrants, and many online
casinos had little competition because they were brave enough to
operate in a legal gray area that any well run business wouldn't dare
enter. That's apart from the fact that it's a type of business that
takes money quickly off the majority of people who mistakenly think
they're luckier than probability theory determines.
The industry is slowly maturing and the margins are getting lower.
For land based casinos it's purely because of the credit crunch. For
online casinos it's both the economy and because of increased
legislation and the enforcement of it.
What you end up having are two things: One is that many of these
companies were founded by people who would likely fail in other
businesses but somehow ended up in this one that made lots of money
easily. For online gambling this includes a lot of young entrepreneurs
who did well but actually have no experience in how to keep a business
running when margins are considerably tighter. The second thing is that
just like the actual product, people in this business have a bit of a
gambling mentality themselves. They took a risk and it paid off.
What is happening now is that as the profit margins are coming down
dramatically, you have budget constraints so a lot of cuts are being
made. Then you have people with no experience in making things more
efficient when margins are lower, so the cuts are generally in the wrong
place. It's all due to a lack of experience or even the ability to
manage budgets and risk properly which is incompatible with a high risk
The result is that you have lots of people with no experience and no
contribution getting high paying jobs not doing much, and this lasts for
a while before the company is really able to weed these people out.
People with real skills and experience are surrounded and outnumbered by
these types. It's hard to fix. It actually requires a dramatic
culture change which is a very hard thing to pull off in companies that
have been enjoying very big revenues and have people involved who
developed egos over this and can't let go.
One good thing comes from this. It means there's a lot of gaps in
the market for companies that can offer a better product with lower
overhead. We'll see both this happening, and the big players merge and
consolidate to get some efficiency gains.