.svg)
Body
As sports betting continues to capture most of the headlines, industry executives say legalization of internet gaming has not kept pace because the gaming industry simply has not made a broad enough case to legislators and governors for legalizing iGaming.
“There was some self-delusion that iGaming would automatically be adopted after sports betting,” said Howard Glaser, global head of government affairs at Light & Wonder.
As of July 30, sports betting was live or regulated in 31 states and the District of Columbia, with wagering having been legalized but regulations not yet adopted in Kansas, Maine, Ohio and Massachusetts.
Currently, New Jersey, Pennsylvania, West Virginia, Delaware, Michigan and Connecticut are the only states that have legalized online casino gaming. Nevada regulates online poker only.
“Once we educate policymakers, you will see the pace of expansion of iGaming pick up,” Glaser said Tuesday (August 23). “States are also flush with billions in federal stimulus funding from the pandemic, lessening the need for new revenue sources.”
As those federal dollars get spent, Glaser expects states “will turn on the digital casino gaming channel to obtain the $5bn in revenue that is currently being left on the table.”
Among the states considered likely to legalize iGaming, Indiana has always been the favorite among analysts, even though efforts over the last couple of years have fallen short.
At a conference in Boston last month, Republican state Senator Jon Ford told VIXIO GamblingCompliance that lawmakers are drafting legislation to be introduced next year, trying to improve on the two bills that went nowhere in the House this year.
Ford cautioned that, in Indiana, the narrative of passing iGaming simply to raise revenue was not working.
“The arguments for iGaming are all connected and boil down to three things — regulate it; protect the players; capture revenue,” Glaser said.
He added that dozens of states that already have “land-based casino gaming merely have to turn on the digital channel to realize tax revenues, which are otherwise being siphoned off by the prevalence of illegal off-shore internet gaming.”
Other states targeted for legalization in 2023 include Illinois and New York.
Illinois has done well with legal mobile sports betting, as well as video gaming terminals (VGTs) and land-based casinos. Legalizing internet gambling would be estimated to generate about $200m in tax revenue.
“Illinois historically has looked to gaming expansion for new revenue and with expected budget pressure and pension obligations to be met, iGaming could be an option on the table,” Glaser said.
In fiscal year 2019, Illinois' unfunded pension liability was $229.89bn, followed by New Jersey at $112.55bn, according to Moody’s Investors Services.
State Senator Joe Addabbo, a Democrat who chairs the Senate’s Racing, Gaming and Wagering Committee, has been making the rounds at gaming conferences over the summer admitting there was not enough time left in New York's legislative session to pass both iGaming and downstate casinos.
Addabbo’s committee approved his Senate Bill 8412 that would have authorized internet gaming through two online casino skins for each of the state’s commercial and tribal casino-resorts. But the bill never made it to the Senate floor for a vote.
Instead, Democratic Governor Kathy Hochul signed a budget that accelerates the process of issuing three new licenses destined for the downstate region of New York.
Addabbo plans to introduce a new bill when the legislature convenes next year. He also suggested during a conversation last month at SBC Summit North America that legal iGaming could be considered as part of passing New York’s next state budget in 2023.
As Maryland regulators continue to make progress toward the possible launch of mobile sports betting in February, the state’s top regulator confirmed Tuesday that it is unlikely the state “will move to legalize iGaming anytime soon.”
“Maryland Lottery and Gaming doesn’t take any position regarding online casino gaming, which may need to be approved by voters in a referendum,” John Martin, director of the Maryland Lottery and Gaming Control Authority, said Tuesday in an email.
Maryland is surrounded by four states that offer iGaming.
“We know it’s important to meet changing customer demands, and customers increasingly expect everything to be available online, including gaming options,” Martin said. “We’re prepared to work with lawmakers and gaming stakeholders to examine the possibilities.”
