The Surprising Impact of Online Gambling on Traditional Casinos: A Deep Dive

Key Takeaways:

• The introduction of online sports betting and iGaming has not cannibalized brick-and-mortar casinos but rather contributed to their growth.
• A new study by the Sports Gaming Alliance, examining the economic impact of iGaming in five states, predicts significant revenue increases.
• Despite fears, the majority of consumers continue to engage with land-based casinos, even with the availability of online options.
• Concerns remain regarding the potential for increased gambling addiction rates with the expansion of iGaming.

The arrival of online sports betting and iGaming has sparked a hot debate: Will the digital expansion cannibalize the traditional, brick-and-mortar casino sector? The answer, according to a comprehensive 167-page study released by the Sports Gaming Alliance, is a resounding no. Instead, the evidence suggests that the burgeoning world of online gambling is set to bolster the health, sustainability, and growth of the overall gambling sector.

A Closer Look at the Study

The study, carried out by the Analysis Group on behalf of the Sports Gaming Alliance—a conglomerate of industry giants like DraftKings, BetMGM, Fanatics Sportsbook, and FanDuel—dives deep into the states where iGaming has already made its mark. Titled "The Potential Economic Impact of Legalizing iGaming on Casino Revenues in Five States," it focuses on Maryland, Virginia, Louisiana, Illinois, and New York, all of which are currently weighing the pros and cons of integrating online casinos into their gambling frameworks.

Using data from states where iGaming is already operational, such as New Jersey, Delaware, and Pennsylvania, the study paints a promising picture. Notably, in these states, land-based casino revenue climbed by 2% following the advent of online gambling platforms. Specifically, Maryland stands to gain an impressive $206.5 million in revenue from 2026, should voters green-light iGaming in the upcoming November ballot.

Consumer Habits: A Shift or Status Quo?

One of the most compelling findings from the Analysis Group's research is consumer behavior. Through interviews with 2,389 people across the six states that currently support iGaming, the study reveals a reassuring trend: the majority of gamblers haven't abandoned brick-and-mortar establishments in favor of online options. This suggests that online and offline gambling markets can not only coexist but thrive together.

Addressing the Elephant in the Room

However, the study isn't without its gaps. A critical concern among lawmakers and the public alike is the potential for increased gambling addiction. With iGaming making gambling more accessible than ever, the fear is that at-risk populations could suffer. For instance, New Jersey has seen its number of at-risk players double the national average since embracing iGaming.

The Sports Gaming Alliance, while championing the cause of online gambling expansion, has yet to address these concerns comprehensively. There's a growing call for the Alliance and stakeholders within the iGaming industry to provide clearer insights into how they plan to mitigate the risks associated with increased gambling access.

The Bottom Line

The integration of online sports betting and iGaming into the gambling ecosystem appears not only feasible but beneficial to the traditional casino sector. However, as the industry moves forward, a balanced approach that considers both economic benefits and social responsibilities will be paramount. The future of gambling could very well lie in an omnichannel approach, where online and offline experiences complement each other, fostering growth while ensuring consumer protection.

(First reported by: Sports Gaming Alliance, Date not provided)