IGaming’s revenue eclipses all other forms of online gambling; What does 2022 have in store?

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Note: This is part of a series of articles on what the sports betting landscape will look like in 2022.

The American Gaming Association’s Commercial Gaming Revenue Tracker tells the dramatic story of iGaming in relation to the rest of the gaming world.

For the first nine months of 2021, iGaming – which are online slots and table games – saw the biggest increase in gross gaming revenue compared to the same three-quarters of the 2019 pre-COVID 19 pandemic by compared to all other forms of gambling, including sports betting.

And it was not close.

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The big figures of iGaming in 2021

Gross gaming revenue for iGaming from January to the end of September 2021 showed an increase of over 644% compared to January-September 2019. The same period comparisons for other gaming verticals were as follows: Sports betting (as of retail and online), nearly 350%; retail niches, 9.8%; retail table games, minus 1.2%, and the gaming industry as a whole, 19.8%.

In addition to the “wow factor”, for most of the period measured, the first nine months of 2021, only five states, New Jersey, Pennsylvania, Michigan, West Virginia and Delaware had launched iGaming – a sixth, Connecticut, launched in September.

For all the hype around sports betting, especially online sports betting, and the fact that 31 jurisdictions (30 states and Washington DC) now have some iteration of sports betting (with more to come), they Whether retail or online or both, compared to barely a handful of states with iGaming, the two verticals have worked neck and neck for the first three quarters of 2021 in terms of gross gaming revenue.

Sports gambling (retail and online) accounted for $ 3.16 billion from GGR while iGaming had $ 2.98 billion from GGR. As a percentage of the total gaming industry’s GGR of $ 43.43 billion – and that’s casino and online combined as well as sports betting – iGaming, alone in a few states, contributed nearly 7% of this total.

iGaming brings in significant tax revenues to states

The numbers are equally impressive when analyzing iGaming as a tax generator. For September in New Jersey – a state with a mature physical casino industry, as well as strong online and retail sports betting, as well as an iGaming component – iGaming (with a 15% tax rate) provided more state tax dollars, $ 18.5 million, than Atlantic City’s nine actual casinos (8% tax rate) with $ 17.3 million in taxes. Sports betting, which made the billion dollar headlines this month in Jersey, brought in just over $ 10 million in taxes.

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Michigan has also done well with iGaming. The online game launched there in January. As of November, the state had collected $ 179.1 million in taxes, Detroit had collected $ 49.4 million, and the state’s tribal operators had earned $ 19.7 million.

iGaming, a difficult sale to legislators

These are pretty amazing, and even surprising, metrics, even to some people fairly familiar with the gaming industry – and they pose an obvious question.

So if iGaming is so lucrative, both in terms of revenues for operators and, therefore, in taxes paid to governments, why haven’t more states legalized online casino gambling?

Well, in short, iGaming is much harder to sell to state legislatures than other forms of gaming in terms of optics.

“When people hear sports betting,” said one industry player, “they hear sports. “When they hear playing at the online casino, they simply hear gambling. “

Outlook for iGaming in 2022

Indeed, several states are set to launch some type of sports game in 2022, online or retail, but iGaming is hardly on the radar in state capitals.

In early 2021, an iGaming bill was introduced in the Indiana State House of Representatives, but it did not gain popularity. In Iowa, the Iowa Gaming Association, which represents licensed casinos in that state, said it didn’t expect a serious conversation on the subject in the state legislature in 2022.

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There are serious headwinds for iGaming in several directions. On the one hand, 2022 is shaping up to be a fairly controversial election year and politicians have enough delicate ground to navigate without taking a stand on a topic like internet casino games. On the other hand, there has been and will continue to be opposition from the physical casinos themselves who fear cannibalization of their own businesses in person if players decide to play slots and blackjack at home instead. than going to a real casino where they’d also eat and drink, shop and maybe watch a show.

Without a cohesive game plan that the gaming industry can provide to lawmakers, there is little chance that iGaming will secure a serious audience, regardless of the spectacular potential revenue numbers that financial analysts are touting regarding its future.

How the industry can push iGaming

This game plan that the industry should come up with would necessarily include a holistic and effective approach to problem gambling since online gambling will be seen in some quarters as a potentially more insidious form of gambling than, say, sports betting.

At the Global Gaming Expo in Las Vegas in October, Anika Howard, vice president of brand and digital marketing for Foxwoods Casino in Connecticut, spoke about her company’s successful approach to persuading policymakers in that state regarding iGaming.

As mentioned, Connecticut is the newest state to launch into online casino gaming.

“It’s an ongoing process,” Howard told G2E. “It’s a commitment to responsible gaming and it’s an education around technology so that regulators feel comfortable being able to regulate and that it will be a safe environment for gamers. “

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