iGaming Revenue Continues to Outpace Sports Betting

Online sports betting has been the rave recently. From the numerous gaming ads posted by all the operators, to sportsbook odds on your favorite TV sports shows and gaming companies reaching deals with professional sports teams, it’s nearly impossible not to notice online sports wagering’s growth. 

Despite more states legalizing sports betting and how it has entered the mainstream, it still vastly pales compared to the revenue states receive from online casinos and iGaming, according to a presentation at the Global Gaming Expo in Las Vegas on Monday. 

With 30 states, sports betting produced $560 million in revenue in 2021, while iGaming totaled $970 million in revenue with only six states. Michigan, West Virginia, Pennsylvania, New Jersey, Connecticut and Nevada are the only states with legalized iGaming. 

The outlook on both fields of gambling shows an even larger divide. According to VIXIO Gambling Compliance, if each of the states legalized iGaming, VIXIO estimates iGaming will produce nearly $5 billion in revenue in the future, with sports betting projected at $1.3 billion.

“That’s another $5 billion in tax revenues that states are leaving out on the table by not adopting iGaming,” Howard Glaser, Global Head of Government Affairs and Legislative Counsel, said during Monday’s presentation. 

$1,000 No Sweat First Bet

Lawmakers Slow to Adopt iGaming

Brandt Iden served in the Michigan House of Representatives and was instrumental in pushing legalized sports betting and iGaming in Michigan. Now, Iden serves as the Head of Government of Affairs for Sportradar and was on hand at the Global Gaming Expo to detail the challenges lawmakers have in passing iGaming, despite the high reported revenue figures. 

According to Iden, a lot of it stems from lawmakers’ unfamiliarity with online sports betting and online casinos. Even with sports betting there is a little bit more familiarity since it can be explained by wagering on the outcome of a sporting event. But Iden acknowledges most lawmakers ran to represent their local schools or farm communities — not show up to the state capitol to discuss gaming. 

“Part of the process is education, for sure,” Iden said. “I’ll be more critical of the industry and say we kind of screwed up, because I believe pushing that boulder uphill, whether you’re taking a vote on sports betting or iGaming, it’s just as hard for a lawmaker. Whether they’re interested in sports betting or not, it’s a gaming vote that they have to go back to their district and rationalize with their voters, and then to say, well, in two years I’ll ask you to take an iCasino vote. That’s very difficult to do and you have to rationalize it again.”

Iden mentioned he found success by introducing both sports betting and iGaming at the same time as he re-opened the state’s gaming act after it hadn’t been touched in 24 years. Michigan casinos and sports betting launched in January 2020.

“We opened it up, changed it and updated it for the future,” Iden said of the gaming act. “We hopefully put the checks and safeguards in place to ensure that we are successful for another 25 years because chances are legislators are not going to go back and open that up and want to do it again. 

“It starts with education, and it starts with making sure that whether it’s the industry, or whether the sponsor of the bill has the ability and information to go in and truly sell to their colleagues everything we’re talking about here today.”

Debunking Brick-And-Mortar Effect Myth

Five states considered iGaming legislation this year, including New York, Kentucky, Indiana, Iowa and Illinois. Iowa and Indiana appear to have the most traction towards legalization in the future, and the panel during Monday’s presentation felt those two would be the next states to introduce iGaming. 

Iowa has 12 casinos in the state, but according to Jonathan Michaels, Senior Vice President, Strategic Development and Government Affairs, not all the casinos are on board with iGaming. Brick-and-mortar casinos have been common oppositions to iGaming, believing it will take away from its retail casino business. 

“When you have 12 casinos in the state and a third of them are opposed to iGaming right now, you’re not going to have things move forward,” Michaels said. “I think because of the cannibalization part, right?”

Michaels went on to detail that from 2019 to 2021, states with iGaming, New Jersey, Pennsylvania and Michigan saw greater casino growth than Iowa, Indiana and Maryland, where iGaming is not present. New Jersey had a 25% revenue increase during that span, while Pennsylvania was at 31% and Michigan was 64%. By comparison, Iowa was at 20%, Indiana 10% and Maryland 9%. 

“So if you’re saying it hurts the overall business, the numbers are pretty clear that the states with iGaming are doing better than those without,” Michaels said.

Over a 12-month period through June 2022, Michigan, New Jersey and Pennsylvania’s land-based and online casino gaming markets accounted for $12.04 billion in revenue, with iGaming accounting for $4.58 billion (38%). 

 

Source: Read Full Article