New US association highlights risks, vows to fight iGaming expansion

A newly-formed association, which has brought together various stakeholders in the land-based casino sector, has put forward a warning in which it signaled an alarm over the social ills and economic costs that are tied to the iGaming sector.

iGaming tied to societal and economic costs that negate extra revenue stream

According to the National Association Against iGaming (NAAiG), there are well-reported economic and social dangers to expanding online casinos. As a result, the association will seek to mobilize local communities and lawmakers to oppose any such attempts.

To illustrate the urgency of the matter and its point, a new study by The Innovation Group commissioned by the association takes a closer look at the supposed benefits of expanding iGaming.

While iGaming indeed generates a much higher turnover, and by extension, tax windfall for states that have legalized the activity, the societal and economic costs in the long run may be far graver than the short-term cash injection suggests, the NAAiG argues.

The association has gone on to outline a number of important consequences of passing iGaming legalization. For starters, the land-based sector on average suffers 16% revenue drop as a result of iGaming legalization, leading to job losses, "and hundreds of millions of dollars in lost economic output."

According to the association, there will be a further 4,921 jobs lost in New York and 4,7333 in Illinois by 2029. The study claims that because of iGaming legalization, state gross domestic products are also under threat and suffer losses.

On the matter of the extra tax windfall that iGaming could be bringing in, the association argues that when factoring the outlined societal and economic costs, the net tax gains would be limited at best, with a particular increase in the number of problem gamblers.

Those employed in the land-based sector will also suffer in other ways, too. Because of iGaming, workers at land-based casinos will see slower wage growth.

The dangers of online gambling are well-established in previous studies

Overall, the core message of the new study aligns with that of previous studies that caution that the legalization of iGaming leads to higher gambling addiction rates, reduces economic output, and further diminishes the job market.

The study is well worth reading in its entirety to understand the scope of the outlined issues. The association also cautions that because of iGaming, underage gambling also increases, with 26.4% of adolescents who engage in online gambling ending up developing gambling disorders.

Commenting on these findings and the report’s findings, The Cordish Companies EVP & General Counsel Mark Stewart had this to say:

"iGaming's unchecked access to gambling on cell phones is bad public policy that threatens local jobs and businesses and will cost states. When increased social costs caused by iGaming higher rates of underage and problem gambling are considered, the net tax revenue results are uniformly negative for every state."

He was joined by his colleague, Monarch Casino & Resort, Inc Executive VP and General Counsel Jason Gumer who focused on the fact that iGaming puts vulnerable individuals at a greater risk of financial instability.

Presently, only a handful of states offer online casinos, while the majority have regulated online sports wagering.

Image credit: Unsplash.com