A Tale Of Two Markets: Online And Retail Casinos See Harmony, New Study Finds

Written By Darren Cooper on March 21, 2022
The customer base that has emerged for online gaming is distinct, concludes a new casino industry study.

Humankind’s search for knowledge will never cease.

Which came first, the chicken or egg?

What really happened at the end of “The Sopranos?”

And in the US gambling industry, what is the relationship between online and retail casinos? Do they poach one another’s customers? Live in harmony? Or some strange combination of the two.

In an extensive study of online and retail casino revenue released by Dr. Kahlil S. Philander at Washington State, the conclusion was drawn that the presence of online casinos and sports betting has had a negligible impact on the retail casino industry. The customer base that has emerged for online gaming is distinct.

Checking out the fine print – Who needs Netflix when there are online casino markets?

The study examined multiple markets where there was an existing retail casino presence which then added online platforms. It looked at New Jersey, Pennsylvania, West Virginia, Delaware, and Michigan and used three other states as a baseline comparison.

In just about every instance, each state saw its retail casino GGR (Gross Gaming Revenue) either rise or remain constant with the addition of online casinos to the market.

The research cited multiple reasons for that finding. Mainly, it found that online casino and sports bettors come from a different subset of the population than retail casino users. The online user is typically male, younger, and has a high income. The online casino industry was able to attract new users from unregulated betting activities (this is code for bookies), offering better odds and increased wagering opportunities.

Online gaming spending is likely coming from an individual’s overall entertainment budget. In other words, an online casino customer is probably backing off on Netflix or streaming accounts to spend that money at an online casino.

Online casinos also give users the ability to bet in smaller amounts, the opportunity to shift from table to table (or game to game), and the convenience of doing it from home.

What about the impact of COVID on online and retail casinos?

Is it possible that COVID had a net positive impact on casino revenue?

One interesting finding in the study is that one thing that drove users to online gaming was that they didn’t have to be in crowds, surrounded by possible carriers of the virus.

Dr. Philander’s study does note that it’s impossible to accurately state the impact of COVID on the general market (multiple states) because each state took different approaches to deal with COVID-19’s impact.

The casino survey state by state

New Jersey

The Garden State was the second to legalize online casino gaming in 2013 (Delaware was first). At the time, the retail casino GGR was in decline. With the addition of online gaming, the figures show retail GGR leveled off but has since begun to rise, approaching $500 million by September 2021. The online casino GGR rose to $600 million in that same time period.


Online gaming launched in Michigan in 2021, and revenue quickly reached the same scale as the commercial gaming market. While retail casinos are still not at pre-COVID levels, at under $150 million, online casino GGR is over $200 million.

West Virginia

There is no evidence to show that the legalization of online gaming impacted the revenue produced by the retail casino industry. The overall trend for both is down, with both online and retail casinos producing $60 million.


Delaware’s numbers are down compared to 2012 but have stabilized since COVID-19, with both online and retail casinos producing $50 million in GGR.


Traffic has returned to nearly pre-COVID levels at the state’s retail casinos, but revenue was flat before the launch of online casinos. Online casino GGR is approaching $450 million, while retail revenue is $300 million.

So what happened at the end? This one we know.

The fear in the casino industry that the opportunity to gamble online would steal customers away from its land-based sites is unfounded. Much of the demand for regulated online gaming sites come from users in different demographic groups. It noted a similar impact when it looked at an international market (Denmark).

The study theorizes that with increased marketing, these online users will eventually be attracted to coming to a brick-and-mortar site.

Photo by Ioana Catalina E / Shutterstock
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