A new study is showing exactly how much the states that are eschewing the legalization of online casinos are missing out on the action. And not surprisingly, those losses are adding up into the billions of dollars.
The purpose of the study conducted by the reg tech platform Vixio and commissioned by online game developer Light & Wonder was to determine how much potential revenue each state with legalized online sports betting but not legalized online casino gambling are leaving on the table. And the projected amounts are staggering.
Estimates are that if all the states that offer legalized sports betting were to also legalize online casino gambling, it could create more than $15 billion in tax revenue each year. The total US iGaming revenue could grow to be as large as nearly $50 billion per year.
While there are 31 US states with legal and regulated online sports betting, currently, only seven states are offering legal and regulated online casino gambling – Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia. Those seven states were generating $1.61 billion in annual tax revenue in 2023. By comparison, the 31 states offering legal and regulated sports betting combined to produce $2.06 billion in tax revenue.
Of those seven states, New Jersey is producing the largest iGaming revenue per capita, at an estimated $306 per person. Michigan ($272 per person) is second.
Why The Resistance To Online Casinos?
Two factors appear to be conspiring to bring about the reluctance among US state governments to go ahead with any bills proposing the legalization of online casino sites in their state.
First on the list is the concern that online casino play will cannibalize wagering at brick and mortar land-based casinos in the state. In reality, studies conducted to assess this issue have consistently proven that not only doesn’t the addition of online casino play impact land-based casino action negatively, it tends to lead to an increase in play at those facilities.
A 2024 study conducted by Eilers & Krejcik Gaming and commissioned by the iDevelopment and Economic Association (iDEA) showed that in the seven states currently offering online casino gambling, land-based casino gambling increased on average by 2.43%. In West Virginia, the uptick was 6%.
As part of the study, land-based casino operators were asked if they felt the introduction of online casinos had negatively impacted their business. All 100% responded that there was no evidence of cannibalization.
The second fear about online casinos expressed by state government officials is the sense that online casino gambling is far more dangerous than online sports betting, because large sums of money can be lost in very rapid fashion. There’s also a worry that the ease of access to online casinos makes the chance of becoming addicted more prevalent.
How Much Longer Will States Wait On Online Casino Legalization?
While it’s true that a percentage of people will become addicted to gambling, the fact of the matter is that it is a very tiny percentage. A study by Yale Medicine found that only 1% of gamblers develop an addiction.
That being the case, and with other evidence dispelling the cannibalization of land-based casino revenues, the time has come for states to begin moving forward with online casino legislation.
Until they do, these state governments are leaving a cash cow unmilked, a gold mine untapped.
Explore legal online casinos in New Jersey and play safe at Michigan casinos.
