The Song Remains The Same: iGaming Legalization Struggles Persist In 2023

April 20, 2023
Back
It remains a mystery to many industry executives why some 37 states and the District of Columbia allow sports betting but only six regulate internet gaming, with states such as Indiana, Illinois and New York all coming up short in their efforts to legalize iGaming in 2023.

Body

It remains a mystery to many industry executives why some 37 states and the District of Columbia allow sports betting but only six regulate internet gaming, with states such as Indiana, Illinois and New York all coming up short in their efforts to legalize iGaming in 2023.

Indiana lawmakers are expected to have another chance in 2024 to consider legislation to regulate internet gaming after a proposal was pulled this year over pressure from local governments worried about the loss of tax revenues from traditional casinos and bar owners interested in video gaming terminals (VGTs).

“Two things happened,” Republican state Senate Jon Ford said.

“What I’ll say is we got a bad fiscal note from our legislative services that showed more cannibalization than we had anticipated and quite frankly, we question the validity of that report.”

A report issued in January by the Indiana General Assembly's Legislative Services Agency warned that up to 30 percent of new online gaming revenues would be displaced from existing casino revenues and that it could be higher for a saturated market like Indiana.

“Then we also had more pressure than we expected from … locals and charity groups that benefit from our casino dollars, and they were asking the question, what’s in it for them if we got iGaming.”

Ford, who addressed attendees of East Coast Gaming Congress by Zoom on Wednesday (April 19) from the statehouse in Indianapolis during a break from budget negotiations, said a discussion on VGTs also came up during the current legislative session.

“We decided that we weren’t going to have that discussion, so the bill was pulled,” Ford said.

When asked by Lloyd Levenson, an attorney with Cooper Levenson in Atlantic City, what the possibility of passage of an iGaming bill were next year, Ford said he believed the “possibilities are very good.”

“A few things out of session that we need to work on,” Ford explained. “As always, education. Education of members of both chambers. We have to develop a structure of how we benefit from iGaming.”

Currently, New Jersey, Pennsylvania, West Virginia, Delaware, Michigan and Connecticut are the only states that have legalized online casino gaming. Nevada has also approved interactive gaming, but only for online poker.

Indiana, New York, Illinois and Iowa were all on the industry’s list of states expected to consider legalizing internet gaming.

So far, the New Hampshire Senate is the only legislative body in 2023 to pass a bill permitting online gaming, but did so permitting online table games, and not online slot machines.

The Senate voted 12-11 on March 30 to pass Senate Bill 104, which would legalize online casino gaming through an undetermined number of operators selected by the New Hampshire Lottery Commission.

The bill has been assigned to the House Ways and Means Committee, which has scheduled a hearing on the proposal for April 25.

But industry optimism that the measure will be able to pass the vast, 400-member New Hampshire House after such a narrow Senate vote is in short supply.

“Here is the reality that we need to face now: iGaming is dead in every state this year. It’s not going to happen,” said Howard Glaser, global head of government affairs and legislative counsel for Light & Wonder.

Glaser noted that sports betting has been easier to get through state legislatures, but getting iGaming passed on the back of sports betting has not happened like many assumed it would.

There has at least been a shift in statehouses across the country where advocates no longer have to convince anybody about the financial benefits of iGaming.

“Because the model is proven,” Glaser said. “Here in New Jersey, there has been a 20 percent increase in iGaming revenue in the first two months of this year; New Jersey iGaming revenues are 38 percent of gross gaming revenues overall.”

Where there is a problem, Glaser said, is over “who gets what piece.”

“The realization is that this is a big revenue raiser for states, it’s big for companies and who gets a piece of that pie.”

Glaser used Illinois as an example of the problem that most gaming states are dealing with when trying to legalize iGaming.

“Illinois is a very robust gaming state,” he said. “The only piece it doesn’t have right now is iGaming. You have traditional casino gaming, and you have what some would call distributed gaming, which is VGTs. The gross gaming revenue for the casino side last year was $1.3bn, for the VGT side it was $2.4bn.”

Glaser said the Illinois casino industry says it wants iGaming but what casinos do not want is to give power to an external threat, the VGT industry, by giving them iGaming as well.

“The VGT guys feel the same way about the casino industry,” he added. “So iGaming in Illinois is not going anywhere not because the casino industry didn’t make their case but there is a fight more broadly … about who gets growth. To some extent it was an issue in Indiana.”

“All this is right now, is who is going to be the winner at the end of the day with iGaming,” he said.

Our premium content is available to users of our services.

To view articles, please Log-in to your account, or sign up today for full access:

Opt in to hear about webinars, events, industry and product news

To find out more about Vixio, contact us today
No items found.