Heading to ICE, iGB is preparing you for the biggest trade show of 2024 with this new series covering the latest developments since the 2023 show.
We’ve seen a lot of news about online sports betting in the US this year. Overall, online sports betting is now available in almost half of all US states.
However, igaming has not yet reached the same level of regulation.
Rhode Island was the only state to legalize i-gaming in 2023. This made Rhode Island only the seventh in the United States to do so.
After the governor signed the bill with just hours to go in June, Rhode Island is now expected to go live with online slots and table games in April 2024.
Rhode Island will join New Jersey, Delaware, West Virginia, Pennsylvania, Michigan and Connecticut as the only states to have legalized igaming.
The lack of iGaming legislation is certainly impacting the American online scene. This led to a major rollback of WynnBet back in August, halting operations in a number of states.
Only the operations in Nevada and Massachusetts, where WynnBet operates properties, are guaranteed to continue operating. This has largely shaped the company’s prospects for this year and beyond.
The financial power of iGaming
Despite the slow expansion, Howard Glaser, global head of government affairs at Light & Wonder, called igaming the most successful product in U.S. gaming history.
Obviously a lot of big names still support it, and it’s easy to see why. The segment is widely believed to generate more revenue than sports betting. As the numbers become clear, states will undoubtedly begin to catch up.
Despite only seven states being regulated by the end of 2023, iGaming in the US generated $1.52 billion in revenue in the third quarter. That’s up 26% from the previous year and an all-time quarterly record.
In Pennsylvania, the iGaming segment saw the most significant growth in September. Revenue rose 41.5% to $159.5 million, an all-time high for the state, surpassing the previous record of $148.2 million set in March.
Online slots revenue also increased 47.3% to $114.7 million and Internet table games revenue increased 31.7% to $42.4 million.
Lack of iGaming regulation is a persistent obstacle
Although the signs are positive, limited regulation continues to pose a barrier to progress. Lawmakers are concerned about the potential cannibalization of land-based casinos and the resulting cost to jobs. Also concerning is the potential for increased addiction as accessibility to gambling improves.
Tribal considerations complicate the issue of igaming, while online casinos are less accepted by the general public than sports betting. The resistance from established casino operators is also a real problem.
Illinois was one of the states seen as a potential igaming domino to fall in 2023, and while this has not yet come to fruition, the online casino bill could be revised next year.
New York is also expected to discuss the issue in early 2024 after Sen. Joseph Addabbo Jr. recently announced plans to introduce a bill for a January legislative session.
The financial benefits of iGaming need to be highlighted
In 2024, the industry will continue to have the responsibility to demonstrate the benefits of iGaming to legislators and respond to their concerns. Igaming’s ability to generate tax revenue compared to sports betting could see it become a key player in a number of states as they navigate fiscal crises.
When dealing with lawmakers on the issue of igaming, tax contributions play a much larger role than in sports betting. Igaming offers a sensible solution that is best targeted at specific areas of financial health.
Rhode Island became the first state to legalize commercial igaming since the pandemic. Connecticut launched a tribal-sponsored online casino, while Michigan was approved for igaming before the pandemic.
Significant unfunded pension liabilities in Kentucky and Mississippi suggest that tax revenue from igaming, if targeted, could provide a path forward in 2024.