U.S. iGaming Expansion Expected To Roll Snake Eyes In 2023

March 10, 2023
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Although online casino bills remain on the table in New York and other states, U.S. industry executives are not at all optimistic that any of them will get over the line this year.

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Although online casino bills remain on the table in New York and other states, U.S. industry executives are not at all optimistic that any of them will get over the line this year.

Legal online casino gaming remains confined to just six states, with Connecticut the last state to approve legislation almost two years ago in May 2021.

After a closely watched House bill in Indiana died last month without so much as a committee hearing, internet gaming advocates are now struggling to see that footprint expanding before 2024 at the earliest.

Speaking at the iGaming Next conference in New York City on Thursday (March 9), Light & Wonder global head of government affairs Howard Glaser said there was “a greater chance of the Earth crashing into the sun … than iGaming being passed in any state this year.”

“You have to be realistic about where we are,” Glaser said, citing problem gambling concerns among policymakers, a lack of budgetary need at state level, and continued infighting among different segments of the gaming industry as three key obstacles that have yet to be overcome.

A sweeping bill to legalize internet gaming was introduced last month in the New York Senate and the bill’s author earlier this week warned that incorporating iGaming legislation into the chamber’s proposed budget package was the industry’s only shot at success in 2023.

Any hope that iGaming legislation might be included in the Senate’s one-house budget bill appears to have quickly evaporated, however, amid opposition from New York union groups who are understood to have warned senators over perceived risks of cannibalizing revenue from land-based casinos where unionized workers are employed.

The state budget process is a path to legalizing internet gaming in New York, Glaser said, “but it’s a narrow path and that door is closing over the next 48 hours.”

Speaking on Wednesday (March 8), BetMGM CEO Adam Greenblatt said he expects internet gaming to become legal in New York at some point but declined to predict that regulation would come within the next two years.

“Things move slowly,” Greenblatt said.

Mike Ventre, FanDuel’s senior manager of state government relations, was among several panelists to express optimism of future expansion of iGaming across the U.S., citing New York and Illinois as two obvious candidates given their long histories of constantly seeking new sources of tax revenue.

Illinois is another state where legislation has been introduced so far in 2023, along with Iowa, New Hampshire and Maryland.

“Maybe not this year, but I think it’s inevitable in the United States,” Ventre said.

BetMGM chief compliance officer Rhea Loney suggested Colorado as another potential candidate, but the economy and state budgetary situations would be key to clearing a pathway for expansion.

“It’s going to be a slow crawl, but it will happen,” Loney told iGaming Next delegates.

If there is a silver lining to the slower pace of U.S. legislation, it is in affording operators and suppliers greater bandwidth to focus on product innovation.

With New Jersey, Michigan and Pennsylvania all among the top five largest regulated online casino jurisdictions globally, the U.S. market has now become big enough to justify designing games specifically for American players, said Todd Haushalter, chief product officer for Evolution Gaming.

Future innovations anticipated by Haushalter and other iGaming Next speakers include progressive slot jackpots pooled across land-based and online casinos, a concept which is understood to be waiting final regulatory sign-off in New Jersey.

Multistate wide-area progressive online casino games allowing players to win lottery-size jackpots is another anticipated development that will equally require additional regulatory approval before it becomes a reality.

It is a similar story in a U.S. sports-betting market where the pace of expansion also appears to have slowed considerably in recent months.

After nine states approved sports-betting legislation in 2021, just three followed suit in 2022 and there is no state that seems a slam dunk to regulate this year.

Leading operators have focused more in recent years on expanding into new state markets as quickly as possible than on innovating their products, including by developing new betting offerings in partnership with major sports leagues.

The apparent slowdown in state legislation supports the theory that “the low hanging fruit is gone,” said Casey Brett, vice president for gaming and new business ventures at Major League Baseball.

“Now we’re getting into a day and age where a lot of the [sports]books are really focused on product and tech,” Brett said.

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