One main argument against legalizing online casinos is that iGaming will take business away from existing retail casinos. A recent study from research firm Eilers & Krejcik, however, debunks that theory.
The study completely contradicts a study commissioned by the Maryland Lottery and Gaming Control Agency released last November. The report “iGaming in Maryland” was conducted by The Innovation Group and found online casino legalization would spark an 8.2% drop in brick-and-mortar revenue.
However, the newer study found that of the six states that currently offer online casino gaming, all six saw revenue gains at retail casinos after iGaming was added.
The study gives Maryland lawmakers comprehensive data as they consider legalizing online casinos.
Study analyzed activity over a 16-year period
While Maryland online casinos remain illegal, lawmakers filed two online casino bills for this legislative session. In other words, the future is bright for gambling expansion in the Old Line State.
The study from Eilers & Krejcik analyzed activity over a 16-year period in states like Delaware and West Virginia, where online casinos are legal. It included data from land-based casinos and state regulatory agencies.
The study compared the revenue and growth rate of the retail casinos before and after the introduction of online gambling.
“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%.”
Study: All states enjoyed positive economic growth after adding online casinos
Land-based casinos offer experiences that mobile apps can’t match, such as resort amenities, dining, social activities and entertainment. Furthermore, bettors are not one size fits all. The customer base of the two sectors is different, according to the Eilers & Krejcik study.
“Online casino players tend to be moderately younger and are more likely to be male than patrons of land-based establishments. … The typical state would boost casino revenue by 1.7% annually after introducing iGaming.”
For all six states with online casinos, the study compared quarterly growth rates of land-based casino gross gaming revenue immediately before and after the introduction of online casinos for the maximum allowable periods based on available data.
Every state showed positive growth after the introduction of online casinos.
Why are these results so different from the Maryland report?
In addition to presenting data that supports the positive revenue aspects of iGaming, the study also pointed to flaws researchers found in the Maryland Lottery report.
The study cited the following:
- The report arbitrarily compares performance between 2019 and 2022 for all states, regardless of when they introduced online casinos.
- Four states included in the study launched online casinos after the start of the 2019 comparison period.
- The study erroneously double-counts population growth, which inflates its results.
- It includes minors as part of the potential gambling population.
Proponents of legalizing iGaming in Maryland point to loss revenue
Proponents of iGaming, such as state Sen. Ron Watson, are fighting to legalize mobile betting to collect tax dollars from an industry that’s already operating in Maryland. He says illegal offshore online casinos steal revenue from the state’s coffers.
“We have two choices: We have to increase revenues or reduce expenditures; iGaming is the last piece of the four-legged stool related to casinos and gaming. We need to be able to capture that revenue.”
Watson calls iGaming “the big enchilada.”
Currently, there are two online casino bills in the Maryland General Assembly. Watson’s measure, SB 603, was introduced at the end of January. In the House, Rep. Vanessa Atterbeary filed HB 1319 on Feb. 9. It calls for a voter referendum.
