CDC GAMING REPORTS (February 15, 2024) – A study released Thursday indicates that operators should not worry about their brick-and-mortar casinos being cannibalized by igaming.
Comparing Online and Land-based Casino Gaming, commissioned by the iDevelopment and Economic Association (iDEA Growth) through Eilers & Krejcik Gaming (EKG) claims igaming helps boost brick-and-mortar revenue.
“This study offers compelling evidence that online gambling is a catalyst for growth, not a competitor to land-based casinos,” said iDEA Growth Founder and General Counsel Jeff Ifrah. “The research underscores the conviction that legalizing it drives beneficial economic impact across the industry. As lawmakers consider the merits of legalizing and regulating igaming, they can be assured that it will complement the land-based casinos to deliver even more tax revenues to their states and establish meaningful consumer protections.”
"This study offers compelling evidence that online gambling is a catalyst for growth, not a competitor to land-based casinos."
In the study, EKG claimed a research note by Deutsche Bank overlooked some key factors. EKG’s team also stated that an igaming study by The Innovation Group used flawed methodology when considering potential cannibalization. The study also proposes that there is an average quarterly revenue boost of 2.44% from the introduction of igaming across the six U.S. states that have regulated the activity.
EKG’s team of economists, data analysts, and industry experts compared quarterly growth rates of the six states with legal igaming with a selection of land-based only casino states. It found that five of the six igaming states outperformed the land-based group over the same periods.
“The closer you look at the data, the better it is for the casino markets that have added igaming,” said Eilers & Krejcik Gaming Managing Director Matt Kaufman. “Nearly all states with mature casino markets have experienced land-based casino declines this century. States that have introduced igaming have been materially more likely to see that decline flattening, and at times even returning to growth, compared to states with only land-based casinos.”
"The closer you look at the data, the better it is for the casino markets that have added igaming."
The EKG team used advanced mathematical modeling techniques to study the potential impact of introducing igaming in land-based casino states yet to legalize the online channel. The study concluded a typical state would boost casino revenue by 1.7% annually after introducing igaming.
“iDEA welcomes these findings so that the debate around igaming is centered on real facts and data,” Ifrah said. “This study bolsters our advocacy efforts in key states, and we look forward to sharing the information with policymakers.”