Indiana Online Gambling Could Soon Be Legal With Study’s Help

The Indiana Gaming Commission (IGC) employed the services of Spectrum Gaming Group earlier this year. Spectrum was to perform a study into how prospective online casino gambling would impact Indiana gambling revenue.

Findings of the study have pushed Hoosier State toward the possibility of legalizing online casinos in Indiana.

US online casino growth stunted by fear of “cannibalized” revenue

When the US Supreme Court struck down the federal ban on sports betting in 2018, it swept the nation. Legal sports betting showed exponential growth over the years. Some expected that online gambling would see similar growth.

“That didn’t happen,” said Liught & Wonder’s head of government affairs and legislative counsel, Howard Glaser.

Many states are holding off on legalizing online gambling due to various concerns. The main concern is that the industry would cannibalize revenue by stealing customers from in-person casinos.

Spectrum’s study for IGC pointed out that 29 states outside of Nevada have launched sports wagering since 2018. Whether in-person sports betting or digital. However, only seven total states have launched online casinos since 2013.

The study points to the fear of cannibalized revenue as the reason for the slow growth of online gambling across the nation.

Spectrum study proves benefits to Indiana online gambling industry

Spectrum’s study took a close look at several variables that could impact Indiana’s gambling revenue should online casinos be legalized in the state, including:

1. Whether online gambling would steal revenue from Indiana casinos, sports betting, and the Indiana Lottery.
2. How surrounding states have fared with their online gambling.
3. How online casinos would impact employment in existing Indiana casinos.

The study found that, in states like Michigan, New Jersey, and Pennsylvania where online gambling cohabitates with the state’s existing brick-and-mortar casinos and sports betting industries, online casinos have been lucrative.

In fact, each of these three “big three” states generate over “$1 billion in gross gaming revenue on an annualized basis,” according to Spectrum’s study.

Disproving the cannibalized revenue myth

According to Spectrum’s study, online gamblers in states that offer internet casinos have proven to be a different demographic than in-person casinos and sports betting gamblers.

Those that participate in the internet gambling offerings in these states were a different age group, with online gamblers being significantly younger than in-person gamblers but slightly older than sports betting customers.

This variation in demographic led to no significant cannibalized revenue from in-person casinos and the increased overall revenue from a new demographic of customers.

“Based on results from the six igaming states,” the study stated. “Spectrum does not expect igaming to negatively impact Indiana casino revenues.”

Spectrum also believes that if existing retail casinos were to adopt online gambling, it would be a solution to the problem of in-person casinos’ failing to appeal to a younger generation. The study stated:

“The traditional casino industry has long searched for an effective means of attracting a younger demographic. The retail industry’s core players — particularly slot players — continue to age, and are not being replaced by younger players. As iGaming offers a broader demographic reach, it would help address that demographic challenge.”

Easing concerns of Indiana casino job loss

Another common concern is that employment at retail casinos would be negatively impacted by online gambling. The study found this concern to be unfounded.

“The addition of igaming without live-dealer gaming has no meaningful impact on direct casino employment,” the study stated. “But it would create additional jobs in igaming operations.”

Online gambling is a smoother launch in states with legal sports betting

Indiana launched both in-person and online sports betting in late 2019 with much success. Many internet gambling company executives believe the existence of online sports wagering in a state creates an easy transition into online gambling.

“They already have regulators in place. They have servers in place,” said Richard Schwartz, CEO of Rush Street Interactive, an internet gambling company based in Chicago. “It’s quicker to start up a casino addition.”

It could even be possible to ease the launch of online gambling in states that offer their Lottery ticket sales online, according to New Jersey Lottery’s executive director, James Carey.

Executives like Schwartz and Carey believe that the promise of a smooth transition will lead to online gambling soon launching in several states. Especially those that already have sports betting, particularly Indiana, New York, Iowa, and Illinois.