No new US online casino gaming markets coming this year, industry leaders reaffirm

No US jurisdiction is positioned to legalize iCasinos this calendar year, multiple industry stakeholders reaffirmed during Thursday’s iGaming Next conference.

It will be another year until a state legislature approves regulated digital real money casino gaming offerings, industry stakeholders said Thursday. Though these lucrative offerings are a centerpiece of most American gaming operators’ digital expansion plans, there is little political appetite to legalize these measures in statehouses in 2023.

Speaking at a panel Thursday, Light and Wonder Head of Government Affairs Howard Glaser said no states would pass such legislation before the calendar flips to 2024.

“There’s a better chance the Earth will crash into the sun (this morning) than any state’s iGaming bill will be passed and signed this year,” Glaser said.

Problems stopping iCasino legislation

Fears of gambling addiction and cannibalizing land-based revenues are among the factors delaying iCasino legalization, gaming stakeholders said Thursday.

The idea that a mobile device could essentially function as a slot machine has spooked lawmakers from both parties, gaming officials have said. Unlike sports betting, where competitions come and go and there are long stretches without anything to wager on, online casinos operate 24 hours a day, 365 days a year.

Proponents have argued that these real-money platforms already exist through unregulated, offshore sites and that legalization can create consumer and problem gambling protections that illegal offerings can’t or won’t provide. Still, politicians – especially in traditionally gambling-averse states – have been more reluctant to push online slots and table games, even in jurisdictions that have successfully launched mobile sports betting.

Light & Wonder’s Howard Glaser: “There’s a better chance the Earth will crash into the sun (this morning) than any state’s iGaming bill will be passed and signed this year.”

Some online gambling opponents have also publicly opposed legalization over worries it would hurt a state’s existing brick-and-mortar casino industry. The in-person casino industry and its affiliated hospitality offerings create hundreds of thousands of jobs across the nation and billions in taxes revenue annually. In strong union states, the perceived threat of lost revenue (and jobs) from the existing casino industry has also created additional political pushback.

There has been no evidence that cannibalization happens in legal iGaming states, said gambling industry lobbyist Bill Pascrell III during a panel Thursday, and that iGaming can actually supplement existing revenue streams.

Other issues stem from industry infighting. While the gambling companies themselves have largely warmed up to online casino gaming, overcoming their previous fears about commercial cannibalization from digital platforms, there has been struggles over how to implement such offerings. Legacy brick-and-mortar companies, horse racing stakeholders, tribal gaming entities, state lotteries and other interests in multiple states have struggled to reach consensus on how to enact iGaming markets.

Additionally, lawmakers even in many gambling-friendly states haven’t pushed iCasino offerings hard because they haven’t had the political pressure to do so. Federal stimulus money has buoyed finances in statehouses nationwide, taking away one more political impetus for a new revenue stream such as iCasino gaming.

Current iCasino outlook

Seven states have some form of legal iCasino offering, compared to more than 30 states with some form of legal sports betting.

Four states – New Jersey, Pennsylvania, Michigan and West Virginia – have full, commercial online slot and table game markets. Connecticut allows such offerings, but the only licensed providers are DraftKings and FanDuel. Delaware has a lone government-run iGaming platform while Nevada only offerings real-money online poker.

Five states introduced online casino gaming bills this year: New York, Indiana, Iowa, New Hampshire and Illinois. Speakers throughout this week’s iGaming Next conference were pessimistic that any would pass this year.

Despite the existing political struggles, many industry officials remain optimistic more states will embrace these games in the coming years, especially if there is an economic downturn. For many leading US sportsbook operators, the potential for such offerings remains the justification for hundreds of millions in sports betting player acquisition costs as they hope to one day convert these bettors into far more valuable iCasino customers.