iGaming Experts Discuss Why Online Casino Expansion Has Lagged Sports Betting Growth

iGaming, which includes online slot machines and interactive table games, is legal in only six states. Those six states have won more than $9.6 billion from gamblers through their regulated internet casinos, generating hundreds of millions of dollars in annual tax revenue.

A discussion focused on the future of iGaming and why it hasn’t expanded into new states as fast as sports betting is held during the East Coast Gaming Congress on September 23, 2022. The conference was the 25th installment of the gaming expo. (Image: East Coast Gaming Congress)

At last week’s East Coast Gaming Congress (ECGC) at the Hard Rock Hotel & Casino Atlantic City, a handful of gaming experts with a focus on iGaming gathered to discuss the future of online casino gambling. Titled “Whither iGaming,” the conversation focused on why iGaming has been so slow to expand legally into new states compared with sports betting’s rapid growth.

The limited rollout of igaming nationwide stands in stark contrast to the rollout of sports betting. Why the slow rollout of igaming? Will the rapid adoption of digital sports betting speed up the adoption of igaming? #ECGC @SpectrumGamingG @RSInteractive @delawarenorth pic.twitter.com/VD81EV1HWZ

— East Coast Gaming Congress & NexGen Gaming Forum (@EastCoastGaming) September 23, 2022

The debate was moderated by Sherry Amos of Spectrum Gaming Hospitality Group. Panelists included:

Howard Glaser, Global Head of Government Affairs and Legislative Counsel, Light & Wonder
Jeffrey Millar, Commercial Director, North America, Evolution
Richard Schwartz, Chief Executive Officer, Rush Street Interactive
Luisa Woods, Vice President, Marketing, Gaming & Entertainment, Delaware North

Why iGaming is Moving Slow

New Jersey was the first state to legalize iGaming in 2011. Delaware followed a year later. Connecticut, Michigan, Pennsylvania, and West Virginia have more recently joined.

Single-game sports betting prior to May 2018 was limited to Nevada. But after the Supreme Court ruled that the Professional and Amateur Sports Protection Act violated anti-commandeering interpretations of the US Constitution, states were given the freedom to determine their own sports betting laws.

Thirty-one states plus DC have since legalized sports betting in the four years following the landmark SCOTUS decision. Many of those legal sports gambling jurisdictions additionally allow wagers over the internet, so long as the bettor is physically located within the state.

The question begs, “Why has sports betting, a gaming vertical far less profitable than iGaming, expanded so much faster?” The “Whiter iGaming” panelists cited some states’ concerns that iGaming would hurt brick-and-mortar casinos.

Those concerns might be warranted. In New Jersey, for example, iGaming websites reported gross gaming revenue (GGR) of $1.36 billion last year. In 2019, online slots and tables won just $482.7 million — 180% growth. Meanwhile, Atlantic City casinos won $2.55 billion on their physical slot machines and table games in 2021. But in 2019, the nine land-based casinos won $2.68 billion — a reduction of nearly 5%.

Is iGaming poaching play from the brick-and-mortar casinos in Atlantic City? Luisa Woods, vice president of marketing, gaming, and entertainment for Delaware North, doesn’t think so. Woods, who previously headed Tropicana Atlantic City’s digital operations, said iGaming only grew the casino’s player database.

We integrated the brand. We created loyalty accounts for every single remote customer. We had people who would show up at the property for the first time and have a [casino] host already assigned to them,” Woods explained.

But the numbers, at least in Atlantic City, suggest some of the former retail play might have moved online.

Expansion Forthcoming?

The iGaming panelists generally backed the thought that new states will legalize online casino gambling in the coming years. And they say the many states that now have experience regulating some sort of online gambling via mobile sports betting are most ripe for iGaming.

They already have regulators in place,” said Richard Schwartz, CEO of Rush Street Interactive. “They have servers in place. It’s a quicker start-up.”

iGaming, compared with sports betting, is much more a moneymaker.

In New Jersey, retail and online oddsmakers won $815.8 million last year — 40% less than iGaming. In Pennsylvania, iGaming GGR totaled more than $1.1 billion last year, while sportsbooks won $340.1 million. In Michigan, 2021 iGaming revenue was north of $1 billion. Oddsmakers won about $319.5 million.

The post iGaming Experts Discuss Why Online Casino Expansion Has Lagged Sports Betting Growth appeared first on Casino.org.

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