With Rhode Island this week becoming the seventh U.S. state to launch internet gambling, industry panelists at an online gambling conference predicted Wednesday that several additional states would join the fray in the next few years.
Speaking at the Next.io forum on internet gambling and sports betting, several mentioned New York and Maryland as likely candidates to start offering internet casino games soon.
WILL ONLINE GAMBLING SPREAD BEYOND THESE SIX STATES, OR IS IT JUST A FAD?
And some noted that, despite years of difficulty crafting a deal that satisfies commercial and tribal casinos and card rooms, California is simply too big a market not to offer internet gambling.
“Some of the dream is not quite fulfilled, which creates some opportunity,” said Rob Heller, CEO of Spectrum Gaming Capital.
Before Rhode Island went live with online casino games on Tuesday, only six U.S. states offered them: New Jersey, Connecticut, Delaware, Pennsylvania, Michigan and West Virginia. Nevada offers internet poker but not online casino games.
Elaine Vallaster plays an online slots game on her tablet in Hazlet, N.J. on November 24, 2023. (AP Photo/Wayne Parry)
Shawn Fluharty, a West Virginia state delegate and chairman of a national group of legislators from gambling states, listed New York and Maryland as the most likely states to add internet gambling soon.
He was joined in that assessment by Brandt Iden, vice president of government affairs for Fanatics Betting and Gaming and a former Michigan state representative.
Both men acknowledged the difficulty of passing online casino legislation; Thirty-eight states plus Washington, D.C., currently offer sports betting, compared to seven with internet casino gambling.
Part of the problem is that some lawmakers are unfamiliar with the industry, Iden said.
“We talk about i-gaming, and they think we’re talking about video games,” he said.
Fluharty added he has “colleagues who struggle to silence their phones, and we’re going to tell them gambling can be done on their phones?”
Some lawmakers fear that offering online casino games will cannibalize revenue from existing brick-and-mortar casinos, although industry executives say online gambling can complement in-person gambling. Fluharty said four casinos opened in Pennsylvania after the state began offering internet casino gambling.
A study commissioned by Maryland projected that adding internet gambling would generate $900 million in annual online betting revenue by 2029, but that it would cost brick-and-mortar casinos $200 million.
The key to wider adoption of internet gambling is playing up the tax revenue it generates, and emphasizing programs to discourage compulsive gambling and help those with a problem, panelists said. New York state senator Joseph Addabbo, one of the leading advocates of online betting in his state, recently introduced legislation to allocate at least $6 million a year to problem gambling programs.
“If you tell them we’re funding things by passing i-gaming, or we can raise your taxes, what do you think the answer is going to be?” Fluharty asked, citing college scholarships as something for which gambling revenue could be used.
One bill pending in the Maryland state legislature that would legalize internet gambling would impose a lower tax rate on operations that offer live dealer casino games and thus create additional jobs.
New York lawmakers have made a strong push for internet gambling in recent years, but Gov. Kathy Hochul did not include it in her executive budget proposal this year.
Edward King, co-founding partner of Acies Investments, said California — where disputes among tribal and commercial gambling operations have stalled approval of online casino games and sports betting — will likely join the fray.
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“It’s an inevitability for a state the size of California,” he said. “The tax dollars are too big.”
Adam Greenblatt, CEO of BetMGM, disagreed, saying California likely won’t approve online gambling anytime soon, and that Texas, another potentially lucrative market, “has successfully resisted it for 20 years.”
