In a groundbreaking study, the effects of online casinos have shown positive growth in the retail casinos located in those markets, contradicting conventional wisdom that iGaming would cannibalize the brick-and-mortar foot traffic and trigger job loss.
Startling Results
One of the major obstacles online casino gambling faces from legislators considering iGaming in their state is the deleterious effects it will have on land-based casinos that have invested millions, sometimes billions, of dollars to build the glitzy gambling dens we see throughout the country. However, a recent study seems to contradict those fears, and its conclusions were surprising to many.
A 167-page study by the highly-acclaimed Analysis Group, Inc., commissioned by the Sports Betting Alliance, an industry group comprised of BetMGM, DraftKings, Fanatics, and FanDuel, researched six online casino markets and the ramifications it had on land-based casinos. The study reported revenue growth at the brick-and-mortar casinos increased by 2% after iGaming was introduced in those markets.
The six US markets that were studied were the only ones at the time in which online casino gaming had been legalized, which includes New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut and Delaware. Rhode Island is the most recent state to join the iGaming club but it did not launch until March 5th and was not part of this study.
If You Know, You Know
The study could tip the scales in favor of online casino gaming in five states currently considering the proposition including New York, Illinois, Louisiana, Maryland, and Virginia. Moreover, many officials at the state’s regulatory agencies that oversee online and retail gaming confirmed what the study revealed.
David Rebuck, the former director of the New Jersey Division of Gaming Enforcement, said:
“When you hear the fearmongering of cannibalization and loss of jobs from internet gaming, I have 12 years of data in New Jersey showing it isn’t true. Online gaming doesn’t cannibalize brick-and-mortar casinos and it doesn’t hurt casino jobs.”
The regulatory agencies that oversee both land-based and online gambling are impartial and have no agenda other than to ensure that the industry stays healthy, thriving and uncorrupted. Therefore, the thoughts expressed by those “in the know” are uniform in expressing their opinion that online gambling does help the land-based casinos’ bottom line, particularly because most also get a piece of the online revenue and can use the digital realm to advertise their terrestrial casinos.
Pennsylvania’s Case
iGaming launched in the Keystone State back in 2019 and Pennsylvania Gaming Control Board Executive Director Kevin O’Toole revealed that land-based slots were up 3.8% in 2023, although table games took a slight dip, down 1.8% from a stellar 2022.
“Just because you have a good amount of customers at your iCasino games or betting sports online doesn’t necessarily mean they’re cannibalizing your land-based properties,” O’Toole commented. “That’s where my comment would be with respect to is there cannibalization. The answer is no. Does that mean you should not worry about it? You should always pay attention to it. You want to make sure you give these casinos an opportunity to continue their success.”
O’Toole further added, “We haven’t seen labor use online casino or sports wagering as a reason to complain about their situations in Pennsylvania. I couldn’t explain why there may be a different perspective in another jurisdiction. I don’t know why these jurisdictions would bring up any issue with job security based upon iGaming.”
