At a recent G2E panel, figures from throughout the industry asserted that the U.S. could gain $30 billion in annual revenue if iGaming would be legalized in the 42 states with commercial and/or tribal casinos and mobile sports betting, per CDC Gaming Reports.
Howard Glaser, Light & Wonder’s legislative counsel and head of government affairs, said, “The potential scope of iGaming is massive, almost competitive with commercial gaming.”
Currently only six states allow iGaming: Pennsylvania, Michigan, Connecticut, New Jersey, West Virginia and Delaware. Nevada only permits online poker. Glaser pointed out that from June 2021 through June 2022, online and land-based casino gaming in Michigan, Pennsylvania and New Jersey’s generated a total of $12 billion−$4.5 billion in revenue, or 38 percent of the overall total. From 2019 through mid-2022, the three states’ total annual revenue increased by just over 50 percent, Glaser said.
“It’s undeniable that the rollout in iGaming in major states, including Pennsylvania, Michigan and New Jersey, has been expansionary to the overall gaming industry in all three states. States with iGaming grow their markets far faster and far larger than states without,” Glaser noted.
He cited three reasons why iGaming is not taking off. First, Covid-19 led to a budget windfall from the U.S. government, lessening the need for additional revenue. Second, lawmakers are concerned that adding iGaming will lower land-based revenue and cost jobs. Third, there’s the risk that iGaming could lead to more problem gambling.
Jonathan Michaels, senior vice president strategic development and government affairs for Sightline Payments, noted iGaming doesn’t have the same consumer interest as sports betting.
He said a “tremendous ground game” is required to reach state legislators and explain the benefits of iGaming.
“We need allies,” he said. “With sports betting, you had a lot of interested parties, such as leagues and teams. No one outside of the gaming industry is interested in pushing forward in iGaming right now. To interest legislators, you need third-party validators. I think there’s an opportunity for national associations to get behind that and drive it forward.”
Brent Iden, former Michigan state legislator and head of government affairs for Sportradar, said the average lawmaker is reluctant to vote for iGaming. He said Michigan benefitted by changing gaming law all at once for the first time in 24 years.
“The industry screwed up. Pushing that boulder up the hill, whether you’re taking a vote on sports betting or iCasino, is just as hard for lawmakers. We as an industry dropped the ball and it’s hard to go back. These legislatures just two years ago helped with sports betting and now you’re now asking for iGaming,” Iden said.
As Glaser pointed out, in 2020, the industry didn’t anticipate states would receive $350 billion in federal funds to help them emerge from Covid-19.
“They didn’t really need iGaming, because the economy is strong and they’re flush with cash. The revenue argument isn’t as solid as it would be. But I’m still very bullish on iGaming. I just think all of these factors have to come into play,” he said.
Addressing problem gambling, Glaser said legislators have “an instinctual feeling” that if slot machines and table games can be played on a phone 24/7, that’s “a different animal.”
Cath Burns, executive vice president of customer service and RMG at Aristocrat, said her company treats iGaming and land-based casinos the same regarding problem gambling.
“As an industry, we don’t want a level of problem gaming,” Burns said. “We’re in uncharted waters now in North America in terms of how this grows and it would be better to take an aggressive posture around responsible gaming, which most operators and suppliers do, and make us a benchmark in this part of the world.”
