Can iGaming Help the Bottom Line for Retail Casinos?

The debate continues to rage in the U.S. legal gambling industry that features the best sportsbooks about just how an expanded online casino platform would help or hinder revenues for brick-and-mortar casinos across the country.

While legal sports betting using the best sports betting apps has certainly caught on and is now available in 38 U.S. states, online casino options have gone live in just six U.S. jurisdictions. Lawmakers and industry insiders have taken their time to consider how much of an effect such a platform would have on the wagering public, and the traditional land-based casinos offering such gambling opportunities.

iDEA (iDevelopment and Economic Association), in conjunction with research firm Eilers & Krejcik Gaming (EKG), has come out with a new study that examines the question of how online gaming would affect the performance of online casinos.

The iDEA/EKG study took data from the six states that are home to a combined mobile and retail casino platform with betting sites and compared those states to others with just land-based retail casinos.

The findings may be surprising to a few.

iGaming is a positive for land-based casinos 

While there's a popular sentiment that iGaming would function as a deterrent for those who would visit a land-based casino, the study found just the opposite is taking place in the U.S. market.

According to statistics, the presence of an iGaming platform in six U.S. states has led to "an average quarterly revenue boost of +2.44%" for land-based casinos in jurisdictions where both retail and mobile gaming is available. Five of the six states with iGaming platforms outperformed the quarterly growth rate of states with a retail-only gambling sector.

Eilers & Krejcik Gaming was able to conclude through advanced mathematical modeling that states yet to legalize an iGaming platform could benefit to the tune of a 1.7% annual revenue injection.

New Jersey case study

New Jersey, which is home to NJ online casino, was one of the states cited in the iDEA study. The Garden State is by far the most successful iGaming state in the nation in terms of registered player counts, gaming revenue, and tax revenue.

Currently, 6600 jobs have been created in the state from its online gaming industry, and about $259 million in tax revenue has been generated so far since legalization in the highly regulated market in 2013.

Revenue growth for the state's land-based casinos has been acknowledged, as has iGaming's ability to bring new customers to land-based casinos.

Study dispels misconception about online casino presence

There have been plenty of studies that conclude iGaming platforms could function as a drain on land-based casinos. iDEA and EKG managed to point out some of the flaws of those studies.

Deutsche Bank and The Innovation Group each concluded that iGaming would hurt the traditional brick-and-mortar providers in various states. But the most recent study flagged a lack of revenue comparision after a particular state launched an online casino platform.

iDEA and EKG also cited the failure of previous studies to account for the impact of COVID-19 on the industry, inaccurate population growth figures for a given jurisdiction, and the inclusion of children as a "part of the potential population of gamblers."