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A new coalition of casino leaders, known as the National Association Against iGaming (NAAiG), has formed to address the growing concerns surrounding the expansion of iGaming across the United States.
The group’s slogan is “Not worth the bet,” and says its mission is to “Protect jobs, communities, and our loved ones by opposing online gaming.” The NAAiG believes that iGaming poses significant risks to both the economy and society, citing concerns about its detrimental effects on public health, job displacement, and the weakening of responsible gaming oversight.
The coalition reinforced its claims by releasing a study from the research and advisory firm The Innovation Group. The study challenges the widely held belief that iGaming expansion boosts state revenue, revealing that the introduction of online gaming has led to a decline of roughly 16% in retail casino revenue.
According to the report, this decrease has brought about several issues, including loss of jobs, economic downturns, and reduction of funds going to public services due to diminished tax contributions.
Alarming Projections on iGaming Impact
One of the highlights of the study is the iGaming loss projections. It claims that losses due to online gaming will exceed $1 trillion by 2028, and this will have cascading effects on local economies and public health resources.
The study also warns about the social costs of online gambling. It estimates that governments could face over $100 million annually in direct costs to address problem gambling and related issues, such as mental health support and addiction treatment. The economic fallout, including lost productivity and financial struggles among gamblers, could be four to five times higher.
The study went on to highlight the connection between iGaming and gambling addiction, stating that 81% of gambling addicts participated in online gambling. It also notes a significant rise in youth gambling disorders in areas where iGaming is legal, with 26.4% of adolescent participants showing signs of addiction.
The NAAiG report also linked online gambling to a 14% drop in household investments and backed these findings with more alarming statistics, including a 267% increase in calls to the National Problem Gambling Helpline since iGaming was introduced.
Serious Economic Concerns Surrounding iGaming Expansion
The study’s projections regarding job losses and economic downturn are striking, even if the Innovation Group acknowledges they may be forward-thinking.
If states like Illinois and New York legalize online gambling, the report estimates nearly 5,000 jobs could be lost by 2029. Other states, including Mississippi, Ohio, and Louisan, could see job losses ranging from 1,900 to 2,800 over the same period.
The financial toll on retail casinos is equally concerning. New York is projected to lose nearly $984 million in revenue, followed by Illinois $545 million, Ohio $523 million, and Maryland $343 million.
These losses would ripple through local economies, with annual wages and employment taxes taking a significant hit. New York’s labor income, for example, could drop by $450 million, while Illinois, Ohio, Maryland, and Colorado could see declines ranging from $110 million to $300 million.
Another key concern is the impact on small businesses. The study notes an 8.3% decline in distributed gaming revenue in areas where iGaming is legal, affecting taverns and small gaming operators that rely heavily on traditional in-person gambling for revenue.
The economic output of affected states is also expected to shrink. Ohio could lose $602 million, Indiana $428 million, Maryland $372 million, and Colorado $313 million. These losses underscore the broader risks of iGaming expansions, which the report argues could cannibalize traditional casino revenue and destabilize local economies. A concern that led to the failure of a recent iGaming bill in Indiana.
Industry Players Claim Findings Lack Full Analytical Support
The NAAiG’s report has drawn criticism from pro-iGaming advocates, who argue that its conclusions are not fully supported by comprehensive analysis. Gene Johnson, Executive VP at Victor Strategies and a seasoned casino industry analyst acknowledges some level of revenue cannibalization but stresses that the study overlooks other factors shaping the gaming market.
Johnson highlights the success of iGaming in states like New Jersey, Pennsylvania, and Michigan, where online platforms have generated billions in revenue without significantly disrupting traditional casino operations. It has also helped stabilize revenues in times of adverse weather or other disruptions that limit land-based visitation.
He also disputes claims that online gambling increases problem gambling rates, citing research that shows no significant difference in addiction levels between online and in-person platforms.
NAAiG consists of several major casino players and is headed by high-ranking executives at top casinos like Red Rock Resorts, Cordish Companies, and Churchill Downs.
Source: Next.io
