Online casino gambling has exploded in the few states where it's legal, but that rocket-fueled expansion might be getting ready to stall.
While Rhode Island in March became the seventh state to allow online wagering on casino games such as blackjack and roulette, only two other states, Florida and New Hampshire, are expected to enter the fray within the next five years. On the other hand, sports betting is legal in 38 states. Online casino gambling lags behind, it appears.
Rise and Potential Fall of Online Gambling
Online betting appeared to be an unstoppable force—not in the Star Wars context. States that needed every extra dollar in tax revenue cheered on the phenomenon, and sports-fantasy heavyweights DraftKings and FanDuel had positioned themselves to reap the full harvest of the nation's online betting stampede—or so it seemed.
Concerns about the social damage of unrestricted access to casino games have given some officials pause. For example: Are online casinos quietly gaining control away from land-based insiders?
"US online casino expansion has been hard, and it's getting a lot, lot harder," managing director at Eilers, Chris Krafcik said.
Industry Divided Over Impact on Land-Based Casinos
The uproar over internet gambling is just as much about jobs as it is about addiction. In reaction to the upsurge of online casinos, some labor unions and land-based casino representatives say that this will only take a chunk out of the dough from brick-and-mortar casinos, reducing people's numbers in employment, Bloomberg reports.
For example, earlier this year, lawmakers in Maryland shot down a proposed bill for online gambling. The local casinos and unions had their say, parrying claims that internet betting was going to eat into their bottom-line revenues. Others bemoaned the fact that there would be a spike in gambling addiction.
Mark Stewart testified before Maryland legislators as general counsel of the Cordish Cos., referring to online betting as a "jobs killer." He highlighted that similar losses had already occurred in states like Pennsylvania and New Jersey.
Debate Over Social Costs and Gambling Addiction
Except for economic effects, the inherent addictive nature of online gaming presents an immense threat. Advocating for stopping predatory gambling, the national director Les Bernal warned that online casino gambling is "as deadly as heroin and cocaine are."
Such testimony of Bernal, accompanied by opposition from influential unions, New York's hotel workers came together to fuel the reversal of expanding casinos online.
Revenue Growth vs. Job Losses
Online gambling revenues in states like New Jersey, Pennsylvania, and Michigan are quite monstrous, and online casino games have proven to be just as effective as their land-based counterparts.
In New Jersey, for example, fiscal-year revenue online for casinos grew 23% to $1.52 billion, while that for its land-based counterpart flatlined at $1.92 billion.
Although the casinos made colossal amounts of money through this business, some operators feel that when they purchased land-based properties and were paying licensing fees they were guaranteed sole rights to casino games. This is a tension that does not go away as long as this debate is pending.
Future of Online Casinos
Online gambling's future is fuzzy. Many take it to be a threat of becoming addictive, while others believe that it would rather take away a part of the old traditional casino revenue.
To Bill Miller, the CEO of the American Gaming Association, "Whether or not online betting will complement or compete with physical casinos" remains unsettled by debate.
