Online Casino Play Is Getting A Boost, But It’s Hard To Count On That Continuing

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Operators of iGaming sites that have acquired new players during COVID-19 stay-at-home orders don’t really count on such growth continuing.

That was one takeaway from a panel discussion on the future of interactive gaming Monday during the ICE North America Digital conference, an online gathering of officials connected to the industry.

Pennsylvania and New Jersey, the leading states with online casino games that can be played from home, both saw a large bump in such play over the latter half of March as brick-and-mortar casinos shut down. Revenue figures to be released over the next few days are likely to show the same thing for April.

Casino customers have modified behavior

A big question for the industry is what happens to such iCasino play and revenue in the future, once people can return to the casinos they have long patronized for socialization and entertainment.

“I would say that it would be unusual to see growth sustained forever,” Jesse Chemtob, general manager and vice president of casino for FanDuel Group, said of new customer acquisition.

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He said that if stay-at-home orders continue, however, there could continue to be “organic migration” of land-based customers willing to modify their behavior and go online for the first time to play.

Aviram Alroy, vice president interactive games for Mohegan Gaming Entertainment Corp., said the company’s biggest growth in online customers has not been from the general public, but people already in its database from brick-and-mortar play at Mohegan Sun properties.

“That is very encouraging for us,” he said, “to know that people who can’t go to the casino right now are able to play online, not afraid of that hurdle.”

Will more states follow?

Another question is to what extent additional states hurting for revenue as a result of coronavirus shutdowns recognize expansion into online gambling as one way of addressing such shortfalls. They can see that Pennsylvania and New Jersey are already deriving significant revenue in a way other states are missing.

West Virginia and Michigan are preparing to launch online casino games this year, but the iCasino industry has not seen anything like the wave of legalization that is spreading online sports betting across the country.

“Every state is going to be dealing with [revenue losses]. We are going to have a significant budget hole,” noted Michigan state Rep. Brandt Iden, who led the legislative effort to legalize online casinos in his state at the same time as online sports betting.

Legislative schedules have also been disrupted by the pandemic, however, and it’s unclear just what could still happen in the way of more states letting people play slots, blackjack, and poker online.

Chemtob said while more states could follow after Michigan and West Virginia, it’s too hard to tell at this stage.

“I think every state is different,” he said. “We’re hopeful that states look at this as a way to drive incremental tax revenue that they might not be receiving from other areas.”

Online casino play can be complementary

There are sometimes worries that adding online casinos could do harm to those that are land-based in the same state, but the panelists said New Jersey’s experience over the past few years demonstrates otherwise.

Iden said that Michigan’s iLottery has profited the state without harming traditional retail lottery sales, and he expects the same complementary equation from adding iCasinos to casinos.

“Once we are up online, I think you’re going to see casinos probably bringing in more foot traffic,” the lawmaker said.

While there are also concerns that the quick pace and easy accessibility of interactive gaming can heighten compulsive gambling problems, the panelists said they’ve yet to see evidence of that occurring more during the pandemic’s increased play.

Chemtob and Avroy said their companies have responsible gambling teams that are monitoring such activity more closely, however, and online tools that enable players to voluntarily set limits on their time and spending are beneficial compared to land-based casinos.

“We haven’t seen any material increase from that perspective, but it’s something we’re keeping an eye on,” Chemtob said.

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Gary Rotstein

Gary is a longtime journalist, having spent three decades covering gambling, state government, and other issues for the Pittsburgh Post-Gazette, in addition to stints as managing editor of the Bedford (Pa.) Gazette and as a reporter for United Press International and the Middletown (Conn.) Press. Contact Gary at [email protected].

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