Online casino expansion is a boon to the land-based sector, study says

Fears that the arrival of online sports betting and iGaming may cannibalize and sap the brick-and-mortar sector have been put to rest as a new study adds to the evidence pile indicating that omnichannel gambling is only going to contribute to the sector’s growth, sustainability, and overall health.

The new study, released by the Sports Gaming Alliance, and spanning 167 pages, takes a harder look at the states where iGaming is already up-and-running, meaning online casinos, and gauges the impact that the potential passage of iGaming would have on five other states which are debating the pros and cons of introducing the activity as well.

In "The Potential Economic Impact of Legalizing iGaming on Casino Revenues in Five States," the authors focus on Maryland, Virginia, Louisiana, Illinois, and New York, all of which are debating whether it would make sense to roll out online casinos as part of their already existing gambling framework, which does cover online sports gambling.

The Sports Gaming Alliance is an industry group, reuniting companies such as DraftKings, BetMGM, Fanatics Sportsbook, and FanDuel, but the study was carried out by the Analysis Group, a research company, hoping to accurately capture the impact that iGaming would have on local economies in the five states that are now debating the matter.

As a point of reference, the study has used New Jersey, Delaware, Pennsylvania, West Virginia, Michigan, and Connecticut, but excluded Rhode Island, which had not been a legalized iGaming state at the time of the conducting of the study.

Overall, the study concluded that in the six states, land-based revenue was 2% higher following the introduction of iGaming and online casinos. Maryland, for example, could benefit from a legalization of iGaming by as much as $206.5m in revenues starting from 2026, as voters head for the November ballot to give their "yay" or "nay" in the matter.

Specifically discussing Maryland, the study argues that state casinos are set to grow by 2.5% annually, but this growth may reach 4.4% when factoring in the impact of iGaming. The Analysis Group also reached out to customers and interviewed them about gambling preferences. A total of 2,389 people were reached out to in the six states that currently support iGaming.

The result is that the majority of consumers have not opted out of land-based gambling, or even decreased their gambling on physical gaming floors as a result of introducing iGaming. The Sports Gaming Alliance has been a firm supporter of the expanded legalization of online gambling.

However, one thing missing from the report, which preys on lawmaker and consumer minds alike is whether the introduction of iGaming is actually healthy, as the public is concerned about the pernicious impact of gambling addiction. To sell its pitch better, the Sports Gaming Alliance may want to also make sure that the public is better informed on whether iGaming expansion would have a heavier impact on vulnerable consumers.

In New Jersey, for example, the number of at-risk players has reached 6%, or twice the national average. Organizations such as the Campaign for Fairer Gambling has already argued that the funding of iGaming could be taken away from other economic sectors.

Image credit: Unsplash.com