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

Earlier this year, the Indiana Gaming Commission (IGC) hired Spectrum Gaming Group to conduct a study. This study was to examine the potential impact of online casino gambling on Indiana’s gambling revenue.

The study’s findings have nudged Indiana towards the potential legalization of online casinos.

Fear of “cannibalized” revenue hampers growth of US online casinos

In 2018, the US Supreme Court’s decision to overturn the federal ban on sports betting created a wave across the country. As a result, legal sports betting experienced a rapid growth over time. Many anticipated a similar trajectory for online gambling.

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

Various concerns are causing many states to hesitate on legalizing online gambling. The primary worry is that the industry would undermine revenue by luring customers away from brick-and-mortar casinos.

Spectrum’s research for IGC highlighted that since 2018, sports wagering has been launched in 29 states excluding Nevada, both in-person and digitally. However, online casinos have only been launched in seven states in total since 2013.

The study suggests that the fear of revenue cannibalization is the reason behind the sluggish growth of online gambling nationwide.

Study by Spectrum confirms advantages for Indiana’s online gambling industry

Spectrum’s study meticulously examined various factors that could affect Indiana’s gambling revenue if online casinos were legalized in the state, including:

1. Whether online gambling would divert revenue from Indiana casinos, sports betting, and the Indiana Lottery.
2. How neighboring states have performed with their online gambling.
3. The potential effects of online casinos on employment in existing Indiana casinos.

The study revealed that online casinos have been profitable in states such as Michigan, New Jersey, and Pennsylvania, where they exist alongside the state’s traditional land-based casinos and sports betting industries.

Indeed, according to Spectrum’s study, each of these “big three” states produces over “$1 billion in gross gaming revenue” annually.

Debunking the myth of cannibalized revenue

Spectrum’s study suggests that online gamblers in states that provide internet casinos represent a different demographic than those who gamble at in-person casinos and engage in sports betting.

The age group of those participating in internet gambling in these states differed significantly. Online gamblers were noticeably younger than those gambling in-person, but slightly older than sports betting customers.

This fluctuation in demographics did not significantly cannibalize revenue from physical casinos, and it boosted overall income from a new customer demographic.

The study stated that, according to the results from the six igaming states, Spectrum does not anticipate igaming to have a negative impact on the revenues of Indiana casinos.

Spectrum also posits that the adoption of online gambling by existing retail casinos could solve the issue of in-person casinos not attracting the younger generation. The study indicated:

The conventional casino industry has been on a prolonged hunt for a successful strategy to draw in a younger audience. The primary participants in the retail industry, especially slot players, are aging and there’s a lack of younger replacements. iGaming could potentially solve this demographic issue due to its wider appeal to different age groups.

Alleviating worries about job losses in Indiana casinos

The study revealed that the worry about online gambling negatively impacting employment at retail casinos, a common concern, was unfounded.

The study asserted that incorporating igaming without live-dealer gaming has no significant effect on direct casino employment. However, it would generate extra jobs in igaming operations.

States with legal sports betting have a smoother launch of online gambling.

Indiana successfully initiated both online and in-person sports betting in late 2019. Many executives of internet gambling companies are of the opinion that the presence of online sports betting in a state paves the way for a smooth transition into online gambling.

“Regulators and servers are already in place,” stated Richard Schwartz, CEO of Chicago-based internet gambling company, Rush Street Interactive. “This makes launching a casino addition a quicker process.”

James Carey, the executive director of the New Jersey Lottery, suggests that the initiation of online gambling could potentially be simplified in states that already sell their lottery tickets online.

Schwartz, Carey, and other executives believe that the assurance of a seamless transition will soon result in the initiation of online gambling in several states. This is particularly true for states that already have sports betting in place, such as Indiana, New York, Iowa, and Illinois.