The calendar flip to 2023 marks 10 years of regulated online casinos in America. Most expected the industry to grow much faster, but a decade later, only six states that have legalized internet gambling.
New Jersey, Delaware, Michigan, Connecticut, Pennsylvania, and West Virginia have shown incredible growth, collecting large sums of revenue for each state. However, lawmakers show concern for the future of land-based casinos, highlighting the magnitude of job losses that could follow.
Expected Expansion of iGaming this Year
Forecasted expansion focuses on four additional states this year, including New York, Iowa, Indiana, and Illinois. According to the Light & Wonder head of government affairs Howard Glaser, further legislation could be expected for Louisiana, Colorado, Maryland, Kansas, and Ohio as well.
Stating that iGaming has not expanded as fast as supporters have hoped, Glaser commended:
“That hasn’t happened despite the fact that iGaming is the single-most successful launch of a casino product in the history of the United States, if not on the globe. We have extremely successful iGaming in New Jersey, Pennsylvania and Michigan, and these each went from zero to billion-dollar markets in a very short time.”
Spectrum Gaming Group’s managing director, Michael Pollock said some legislators across the US are looking at iGaming in terms of what it could generate in revenue, which he said is a shortsighted tactic.
Aiming to generate multiple forms of tax revenue and generate employment, he suggested:
“What we urged legislators to do is look at the bigger picture because if iGaming is coordinated with the land-based casino industry, it becomes a demographic opportunity to reach new customers and get them to visit your property.”
Are Fears Valid?
The year-end report drawn by an analyst of Deusche Bank, Carlo Santarelli, reveals that some cannibalization concern is valid. Lockdowns and closures of land-based casinos had a drastic impact, during which iGaming grew. He stated:
“While the return of the core regional gaming customer has been strong, the performance has not been uniformed across all markets. Based on our data tracking, we think there is a fairly compelling argument to be made that icasino is responsible for the sluggish relative trends in certain states.”
Deutsche Bank considered the gross gaming growth of seven states in the southeast, Midwest, and northeast, and compared it to 2019 (prior to the pandemic). September grew by 12%, October by 17%, and November by 6%. On the same basis, the report reveals a decrease of 1% for September, 3% in October, and 12% in November for New Jersey, Pennsylvania, and Michigan, according to Santarelli.