Canadian Online Casino Study Could Help MD With Legalization Efforts

Written By Cheryl Coward on June 27, 2024
The Canadian flag

A new Canadian study could give pro-iGaming legislators some new ammunition when online casino legislation returns to the Maryland General Assembly.

Opponents of Maryland online casinos frequently argued that iGaming would cannibalize the retail casino market. In other words, legalizing online casinos would lead to significant job losses in the state’s retail casino sector.

Despite multiple studies that refuted these claims, some lawmakers used that reasoning to help defeat House Bill 1319. The online casino bill died in the Senate after passing the House by a wide margin.

The Canadian-based study could be used to change some minds.

Ontario experiences economic bump from online casinos

In April 2022, Ontario became the first Canadian province to legalize iGaming. It quickly became one of North America’s largest online casino markets.

According to Ontario iGaming, more than 1.6 million active player accounts were created in the industry’s first year.

Their report said those accounts translated to economic expansion and added tax revenue for the province.

“Ontario’s regulated competitive iGaming market sustained almost 15,000 jobs and added a combined $1.24 billion to federal, provincial, and municipal government revenues.”

The job figure increased by 2,800 from the first year of legal online casinos. Of the $1.24 billion in tax revenue, 63.7% went to provincial government revenue, 30% to federal government revenue, and 6% to municipal governments.

Multinational professional services firm Deloitte conducted the study of the Ontario casino market.

Per Ontario iGaming, the province “hit or has nearly reached many of Deloitte’s year-five projections in just its second year” for government revenues (94%), direct jobs sustained (120%), and total full-time jobs sustained (92%).

Martha Otton, Ontario iGaming executive director, said the new sector was the driving force behind the government hitting its goals.

“Through the development and growth of Ontario’s regulated iGaming market, we’re helping achieve the government’s goals in terms of job creation, innovation and development, while providing a safer experience for consumers.”

Positive job growth reflects findings of legitimate U.S-based studies

Industry experts and trade associates have all cited the positive effects on state economies.

A comprehensive study commissioned by iDEA Growth (iDevelopment and Economic Association) and conducted by Eilers & Krejcik Gaming (EKG) surveyed the economic landscape of six states before and after online gaming.

Released in February, that study revealed “a positive change in quarterly growth” after the introduction of online casinos in every state surveyed: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia.

“When it comes to gross gaming revenue, all six states with online casinos showed an overall positive growth in gross gaming revenue. In all six states, land-based casino revenue was positively impacted by the introduction of online casinos. The amount of that improvement, quarterly, ranged from +0.34% in Connecticut to +6.02% in West Virginia, with an average increase of +2.44%.”

Jeff Ifrah represented iDEA and testified during Maryland House and Senate hearings about online casino legislation. During his testimony, Ifrah said there was no indication that online casino legalization hurt the brick-and-mortar industry.

Opponents relied on a flawed study

A study commissioned by the Maryland Lottery and Gaming Control Agency and released last November claimed the opposite effect. Although anti-iGaming advocates often cited the study, it was flawed in multiple ways.

The study featured a faulty comparison of performance metrics between 2019 and 2022 for all states. It didn’t consider the actual launch dates of online casinos in each state.

Furthermore, the study inaccurately accounted for population growth twice, overestimating the results. Lastly, the study included minors as part of the potential gambling population.

When HB 1319 passed 92-43 in the House, influential Democrat Sen. Joanne Benson cited a report from Morgan State University to bolster her arguments against iGaming. However, the study painted a more balanced picture of online casinos than Benson indicated:

“In conclusion, Maryland’s decision on iGaming will have lasting effects on its fiscal landscape, public health, and societal well-being. A cautious, well-researched approach is paramount, incorporating lessons learned from other states’ experiences with iGaming and Maryland’s experience with online sports wagering. A healthy suspicion of current fads promoted heavily by business interests that stand to realize substantial financial gain from such fads is prudent. Only by considering both the potential financial benefits and the social risks can Maryland ensure that any expansion into online gambling is responsible, sustainable, and in the best interest of all its citizens.”

What’s Next for iGaming in Maryland?

Four neighboring states have legalized online casinos: Delaware, New Jersey, Pennsylvania, and West Virginia. Therefore, as those states release more data about their markets, there could be regional pressure for Maryland to join the fray.

Rep. Vanessa Atterbeary and Sen. Ron Watson are the biggest proponents of online casinos in the General Assembly. The two Democrats authored online casino bills in their respective chambers.

They have plenty of time to craft a political strategy for the issue. Since Maryland law requires gambling expansion to be passed at the ballot box, they won’t file new legislation until the 2026 session.

However, since voter approval amends the state constitution, any bill would need yes votes of three-fifths of the General Assembly, not a simple majority. That’s in addition to the voter approval via a state referendum.

The next general election is in November 2026, which means the most optimistic prediction for iGaming coming to Maryland is 2027.

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Cheryl Coward

Cheryl Coward is a contributor for PlayMaryland with a background in sports journalism. She started her career as a news reporter in Washington, DC. She’s a die-hard women’s basketball fanatic and founded the website as a result of that passion. She has extensive experience covering gambling and sports betting in California.

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