How the Rise of iGaming is Dividing the Traditional Brick-and-Mortar Casino Industry

Online gaming is garnering attention in numerous state capitals as lawmakers dive into the legislative season. The authorisation of iGaming, featuring interactive slot machines and table games, has become a topic of significant discussion, reflecting varied perspectives on its benefits and drawbacks.

Current Stances on iGaming

• Supporters: Major gaming companies like MGM Resorts, Caesars Entertainment, and Penn Entertainment are backing the expansion of iGaming. Light & Wonder, a leading manufacturer of gaming products, has also invested heavily in its digital operations.
• Opposition: Many regional operators are wary, arguing that iGaming detracts from in-person gaming, which could lead to decreased revenue for brick-and-mortar establishments. Concerns about problem gambling and safeguarding consumers further fuel opposition from companies like Las Vegas Sands and Wynn Resorts.

The Economic Impact Debate

According to a study by The Innovation Group, commissioned by the National Association Against iGaming (NAAiG), there are alarming predictions regarding job losses associated with the introduction of online gambling:

• States like Illinois and New York could witness nearly 10,000 jobs vanish by 2029.
• In Ohio, it is estimated that over 2,800 jobs would be lost. Similar predictions include 2,600 job losses in Louisiana and approximately 1,900 in Mississippi, highlighting the extensive impact of transitioning towards online gaming.

Shannon McCracken, a senior director at Churchill Downs, stresses that iGaming risks eroding communities and threatens local jobs, asserting, “This isn’t just about responsible gaming — it’s about protecting local family-sustaining jobs and preventing financial harm.” Furthermore, Mark Stewart of The Cordish Companies warns that unchecked online gambling may lead to widespread negative repercussions, particularly for state tax revenues.

Supporters of iGaming Emphasise Its Benefits

Interestingly, some operators acknowledge that transitioning to online platforms is a necessary response to changing consumer behavior. Cordish, while opposing iGaming, operates online casinos in Pennsylvania and asserts that they were compelled into this market following legislative changes in 2017.

Industry experts suggest that online gaming doesn’t necessarily hinder brick-and-mortar establishments. Howard Glaser from Light & Wonder describes the current scenario as one where illegal online gambling has already captivated a youth audience. “In markets where iGaming is legal, it’s been complementary [to brick-and-mortar],” he noted, underscoring the possibility of both types of gaming coexisting.

Facts to Consider about iGaming

• The iGaming market is projected to grow significantly, with investments from leading companies signalling confidence in its potential.
• Despite debate, many younger gamblers are already engaged in online platforms, indicating a shift in market dynamics.
• Consumer protection measures need adequate development in the wake of expanding iGaming, to ensure responsible gambling practices.
• Local economic impacts, particularly in terms of employment and service revenue, should be closely monitored as online gaming expands.

Summary

The divide between support for online gaming and traditional brick-and-mortar casinos underscores a broader economic debate as states navigate legislative measures surrounding iGaming. While major companies largely favour the shift to online platforms, many local operators worry about job security and reduced in-person gaming revenue. This evolving landscape calls for careful consideration and proactive measures to protect communities and ensure the future of the gaming sector.