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Leading U.S. operators are now looking to Illinois to get iGaming expansion on the board for 2023, as budget surpluses and lingering cannibalization concerns continue to stifle legislative efforts in other states.
Speaking at the SBC Summit North America in New Jersey, BetMGM CEO Adam Greenblatt said positioning of online casino legislation in Illinois had this week “moved from a player protection foundation to a revenue generating foundation,” with advocates now looking to offer internet gaming as one possible solution to a pending state budget deficit.
“As a result of that shift in perspective, my political advisors are saying that has increased the likelihood of adoption dramatically when coupled with a $1.2bn hole in the budget,” Greenblatt said on Wednesday (May 10).
The BetMGM boss' comments came just a few days after DraftKings CEO Jason Robins also singled out Illinois as the state that “probably has the best chance on the iGaming front this year” during his company’s first-quarter earnings call.
Three internet gaming bills pending in the Illinois House and Senate have not seen any formal action since they were introduced earlier this year, although that is not necessarily a clear indicator of their prospects in a state where a push to expand gambling in the final days of the legislative session is almost an annual tradition.
Other delegates at the SBC Summit also said they were aware of renewed efforts to push internet gaming as Illinois lawmakers focus on the state budget before they adjourn on May 19.
Anticipated opposition from video gaming terminal (VGT) interests is expected to remain a formidable if not insurmountable obstacle, however, although it is also possible that an iGaming proposal could be crafted to mitigate concerns of cannibalization from VGTs in bars and other retail locations.
Illinois is one of the last remaining opportunities for iGaming advocates to avoid 2023 being a second consecutive year with no new states joining New Jersey, Pennsylvania, Michigan and the three other U.S. jurisdictions with lawful online casino gaming.
iGaming legislation also remains in play in Maine and Rhode Island, with a first committee hearing held Wednesday on a bill introduced in late April by the Rhode Island Senate president.
Legislative efforts have already run aground in Indiana, Iowa, Maryland and New York, causing advocates in those states to turn the page and look toward 2024 instead.
Speaking at the SBC Summit, Indiana Republican state Senator Jon Ford said iGaming legislation suffered this year from an unfavorable fiscal analysis that predicted significant cannibalization of land-based casino revenue, with the operator developing a new casino in his own district — Churchill Downs — also expressing concerns having already withdrawn from the iGaming market in other states.
At a more fundamental level, Ford said he and other supporters were still “struggling to get into people's minds what iGaming, iCasino is,” whereas they inherently understood what sports wagering entailed when they approved legislation four years ago.
New York state Senator Joe Addabbo, a Democrat who chairs the Senate’s gaming committee, similarly said that cannibalization was “the one issue that’s stopping us from advancing legislatively, even this year in New York.”
He called for proponents to share as much data as they could with his office to debunk concerns of cannibalization and potential job losses at land-based casinos, but was still optimistic that iGaming would be passed as soon as 2024.
Several SBC speakers suggested that the significant iGaming tax revenues being generated by Michigan and other states gave further cause for optimism that the rate of adoption will inevitably pick up as state governments run out of federal stimulus dollars they received during the pandemic.
When states are forced to contemplate budget deficits instead of surpluses, “I think iGaming becomes a lot more attractive in that scenario,” said FanDuel president Christian Genetski.
Industry advocates have made notable progress in Indiana, New York and other states, without bills actually being approved, Genetski said.
“We’re preparing for that expansion of the TAM [total addressable market] and we think it’s coming over the next couple of years,” he said.
Greenblatt agreed that further adoption of internet gaming was “a matter of when, not if,” provided the industry can effectively address policymakers’ concerns related to transparency, player protection and responsible gaming.
However, the BetMGM CEO is not expecting online casinos in MGM’s home state of Nevada amid ongoing cannibalization concerns from certain smaller Las Vegas casino operators.
“iGaming in Vegas? You have incumbent opposition in Vegas and I don’t think you’ll see progress until that is addressed,” Greenblatt said.
