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Cannibalization concerns derailed online casino efforts in Maryland and New York this year. However, Fanatics VP of Government Affairs Brandt Iden said he believes addressing responsible gaming worries is the bigger issue in passing iGaming legislation in the coming years.
Iden spoke about the road to iCasino legalization in the US last week at the Global Gaming Expo in Las Vegas. He was joined by Martin Collins, chief business development officer for Soft2Bet.
“The RG piece is probably in my mind the most critical piece to being able to advance this industry,” Iden said. “I think that some of the false narratives of cannibalization and job loss … can be overcome with the taxes.”
Responsible gaming concerns laid out in federal legislation
Last month, federal lawmakers introduced the SAFE Bet Act, which creates minimum federal standards for sports betting in advertising, affordability and artificial intelligence.
While industry experts don’t expect the bill to pass at the federal level, it could spark responsible gaming discussions at the state level that also affect iCasino efforts.
The challenge facing the industry is to address the concerns of legislators and regulators without allowing some of the more oppressive constraints in the federal bill. Those include prohibiting advertisements during daytime hours and sporting events, and restricting deposits in a way that could drive consumers to the black market.
Iden said the online gaming industry actually does more to protect consumers than most other industries.
“The narrative out there is that the casino industry preys on individuals or tries to create addicts. The reality of it is that’s not what the industry wants. There’s no way that any operator ever wants anybody to be an addict. We want long-term sustainability in players because we know with addict players, they play for a quick period of time, have their issues and potentially lose a lot of money and they don’t come back. That’s not what the industry is interested in.”
Cannibalization concerns can be overcome
Iden said if people were to remember one point from the panel, he wanted it to be that online casinos do not impact retail-based casino gaming.
He compared it to Uber Eats. When he loves a restaurant, he goes to it regularly. But sometimes he wants to stay home, in which case he might order from the restaurant additionally if he can have it without going out.
“I go to the casino because I enjoy casino gaming,” Iden said. “I am a gambler myself. … But when I’m not in Vegas enjoying the retail experience, I also want to be able to play craps or roulette or blackjack on my phone. And so it’s simply another opportunity for the consumer to participate.”
Iden highlighted Michigan, where he served as a legislator and introduced the online casino legislation passed in 2019.
Since iCasino launched in 2021, Michigan online casinos have generated more than $1.5 billion in tax revenue from the product. And Iden stressed that the state’s brick-and-mortar commercial and tribal casinos continue to go strong while adding online revenue.
“When I go around speaking to tribal leaders on this, they shake my hand and say, ‘Because of what you did with iGaming, we were able to get through COVID,’” Iden said. “Bay Mills is a tribe in the most upper reaches of Michigan, we’re talking nine hours by car from Detroit. They don’t get a lot of traffic. The tribal chairman, who now works for the Department of Interior, says, ‘Your bill saved my tribe.’”
What states will legalize online casino next
Iden wouldn’t predict where US online casinos would be legalized next. However, he provided a type of state likely to move.
“I would look at the state budget and say, “Does it have a history of gaming? Does it need money? Do they have mobile sports betting?’ And you can probably start narrowing it down from there.”
Collins planted his flag on New York online casino as a next mover.
“I was in New York recently. You can see the homelessness situation getting worse. It’s inevitable for me that New York is going to be one of the next states that adds online casino in the next two-to-three years. They have to because they have the responsibility to the people that live there in order to improve the overall situation in the state.”
Iden added that New York lawmakers and gaming commissioners have said they want the downstate casino process to play out before they implement iGaming. But he doesn’t think the state can wait that long.
“The problem is that New York needs the money a lot sooner than that,” Iden said. “It takes a long time to build these beautiful palaces. … The reality of it is if the state wants money tomorrow, it would be simple enough to just pass this and start bringing revenue in.”
Iden said he does think funding needs will motivate more states to embrace regulating iCasino in coming years.
“Across the country right now, we’re starting to see states that need revenue,” Iden said. “The days of COVID money from the federal government are long gone, and they’re probably dealing with a cash crisis in the next two years. … They’re going to need revenue, and lawmakers don’t like to raise taxes on their constituents, so they typically go to businesses first. And iGaming, I believe, is a wonderful way for states to bring in the revenue while at the same time creating a regulated marketplace for consumers.”
