Future of US icasino rests on one factor: money

Future of US icasino rests on one factor: finances
Brandt Iden is promoting icasino. Dressed in an elegant pink suit with three pieces, brown polished loafers, an open-neck spotted shirt, and perfectly styled hair, he epitomizes the classic salesperson. Yet, by 2024, there are few customers.

Following the decision by the US Supreme Court to reverse the Professional and Amateur Sports Protection Act in May 2018, 39 states and territories across the US have authorized some form of sports wagering, but only seven have approved online gaming, which Iden likes to call icasino.

Michigan is one of these states. Iden, who now holds the position of vice president of government affairs at Fanatics Betting & Gaming, played a crucial role in developing the Michigan law that legalized both online sports betting and icasino in 2019. The legislation might have been enacted a year sooner had it not been vetoed by the outgoing governor, Rick Snyder.

Iden had dedicated two years to developing a package of bills. At that time, he expressed feeling "surprised" and "disappointed." Less than a year following, Governor Gretchen Witmer gave her approval to the proposition.
Cannibalisation ... or not? Conflicting reports
Six years later, states such as Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, and West Virginia have all introduced icasino options. Nevada permits legal online poker. However, no state has enacted new gambling laws this year due to concerns over cannibalisation and the potential rise in gambling-related problems. Numerous state bodies, trade groups, and operators have conducted research that returns varied conclusions regarding the cannibalisation issue.
Recently, the iDevelopment and Economic Association (iDEA Growth) released a report countering a 2023 study about the economic effects of online gambling in New Jersey. This earlier analysis from the NERA Consulting Group had already challenged conclusions from a 2019 study on the same subject. The debates center on the extent of online gambling's economic impact in New Jersey and how much the online markets have potentially cannibalised existing ones.

An examination conducted in 2019 by Meister Economic Consulting in combination with Victor Strategies revealed that from 2013 to 2018, the economic contribution of online gambling to the Garden State was valued at $2bn (£1.5bn/€1.84bn). However, a more recent report from 2023 by NERA, prepared for the Campaign for Fairer Gambling, pointed out a considerably diminished economic impact.
The findings from 2023 suggest potential market erosion caused by online gambling. Conversely, the iDEA report includes multiple studies indicating otherwise. The authors of the iDEA study contended that when the online market is regulated, it deters consumers from illegal sites. They further referenced studies highlighting enhanced revenue results in areas where retail and online gambling are both officially permitted.
‘Deceptive story?’

Iden, however, maintains that the net effect is a substantial increase in operator revenue and tax income from online casinos.
As reported by iDEA Growth, five out of six states that allow online gambling have exceeded the performance of those with only physical casinos. Moreover, brick-and-mortar casinos in states where online gambling is legalized experienced a 2.4% rise in quarterly revenue, and in states that might legalize it later, an increase of 1.7% is anticipated.
Iden dismisses worries about cannibalization as “unfounded narratives” and compares online casinos to food delivery services.
“I'm planning to dine at Piero's this evening,” he mentioned earlier this week during the 'iGaming: The Road to Legalization in the US' discussion at the Global Gaming Expo (G2E). “I adore Piero's. Yet, if I prefer staying in, I might order it delivered. It's similar. If I desire a casino’s atmosphere, I'll visit one, but occasionally, I opt for gaming from my own home.”

Engaging in online play has resulted in a substantial boost in tax income for the states offering online casinos. According to statistics from Sports Handle and US Bets, operators in Michigan garnered $1.5bn in gross gaming revenue (GGR) and $779m in adjusted gross revenue (AGR) from sports betting from March 2020 to August 2024. For online casino play, they accumulated $6.4bn in GGR and $5.6bn in AGR. In Pennsylvania, since sports betting was initiated in 2018, there has been $2.6bn in GGR and $1.8bn in AGR. For the online casino segment, launched a year after, the figures are $7.5bn in GGR and $6.2bn in AGR.
Addiction is unpleasant, but by rules come ways to assist
From a purely monetary standpoint, the figures are tough to dispute. Legislators in numerous states, along with advocates for problem gambling, responsible gaming, and religious figures, argue that the financial gain isn't worth the potential consequences. These arguments are both persuasive and often deeply moving.
Dave Yeager, who has recovered from addiction and now provides guidance to gambling addicts with Kindbridge Behavioral Health, penned a book detailing his personal journey. Back in 2005, his gambling habit became so severe that he attempted to end his life by hitting his head against a brick wall. During his two-decade struggle with addiction, he went bankrupt, ended his marriage, stole from colleagues, totaled his truck, and eventually managed to rebuild his life.

“After the January 2020 relapse, my perspective shifted from ‘I had a gambling issue’ to ‘I am powerless over this unless I stay ahead of it,’” he shared with US Bets last year. “I believe I finally grasped what staying in recovery means. Another aspect is the emotion I felt upon truly realizing what I had done to my wife and children; it's something I never want to experience again.”
Yeager's journey is a triumph within the realm of problem gambling. However, it was also a quest to discover assistance. While serving in the military, Yeager developed a gambling addiction, with limited resources for help available. In states where digital sports betting and gambling are legal, operators must prominently display helpline numbers on both their online platforms and in physical casinos. State regulators and operators maintain self-exclusion lists and provide tools for responsible gambling, such as quizzes that assist bettors in assessing if their gambling is becoming excessive.
Financial considerations will be key in iCasino legalization
Iden acknowledges the challenges associated with legal gambling. During his presentation, he mentioned that the journey toward legalization involves "enhancing stronger responsible gaming protections," while emphasizing that a regulated market offers "a channel for consumer protection."
The points for and against legalization aren't anything new, but the focus is on reducing harm through regulations and support initiatives. Ultimately, the debate over legalization will be dominated by one major factor: money.
In the year following the decision to make sports betting a state-level issue, nine states chose to legalize it. Then the Covid pandemic struck. Physical casinos, shops, and eateries were forced to close. States found themselves financially stretched as consumers, many restricted to their homes, curtailed spending. In 2020 and 2021, sports betting was legalized in 14 U.S. locations. Out of these, nine approved both retail and online betting. Since then, three states that only legalized retail betting have also moved to allow digital wagering.
Brandt Iden is promoting iCasino. It's a difficult pitch. When will the states decide to invest?
Iden mentioned that states will likely face a "financial crisis over the upcoming two years." He suggested that this might not be an issue in the current budget cycle. However, as COVID-related funding diminishes, legislators tend to approach businesses for financial support rather than address their constituents directly.
He further predicted, without naming any specific states, that examining state budgets, particularly those with a history of gaming activities, would reveal which states might turn to legal sports betting to fulfill their necessary revenue needs.