Gambling Executives at Atlantic City Conference Predict Massive Internet Casino Growth

Sports betting popularity has swept the country, with states, casinos, and consumers eagerly embracing this new gambling market. However, online casino games have yet to experience the same levels of expansion. Executives of online gambling companies and their technology partners predict that is about to change.

Speaking at the East Coast Gaming Congress in Atlantic City on September 23, executives and their technology partners said the rapid growth of sports betting has provided a ready-made infrastructure and regulatory apparatus for online casino games.

So far, online gambling is legal in only six states: New Jersey, Pennsylvania, Michigan, West Virginia, Delaware, and Connecticut. But panelists at the conference predicted three or four additional states could soon adopt internet gambling, including Indiana, Illinois, Iowa, and New York.

In addition, more than a dozen states sell lottery tickets over the internet, said James Carey, executive director of the New Jersey Lottery.

“I’m confident there’s plenty of room for growth,” said Jeffrey Millar, commercial director of North American operations for Evolution, an online casino content provider.

“The growth in this industry is still in its infancy stages in the U.S.” added David Rebuck, New Jersey’s top gambling regulator as director of the state’s Division of Gaming Enforcement.

Currently, 31 states plus Washington, D.C., offer legal sports betting, with several more expected to do so soon.

Since it launched internet gambling nine years ago, New Jersey’s casinos have earned $4.79 billion from gamblers online, according to the American Gaming Association, the casino industry’s national trade group. That’s nearly twice the $2.47 billion Pennsylvania casinos have earned online since July 2019.

Michigan has earned $2 billion online since January of 2021; Connecticut $199.7 million since October of 2021; West Virginia $137.4 million since July of 2020; and Delaware $42.2 million since December of 2013. Nevada offers online poker but does not break out that revenue separately from the in-person revenue casinos report to the state.

Those figures are for online casino games only, and do not include sports betting revenue, which is reported separately.

New Jersey is on the verge of extending its law permitting internet gambling for another 10 years, and during Thursday’s opening session of the Atlantic City casino conference, the state’s Democratic governor, Phil Murphy, promised he would sign the bill it if passed.

A 2018 U.S. Supreme Court ruling in a case brought by New Jersey cleared the way for all 50 states to offer legal sports betting should they choose to do so. With that rapid expansion came an expectation in some quarters that internet gambling would almost automatically grow at a similarly rapid pace.

“That didn’t happen,” said Howard Glaser, head of government affairs and legislative counsel at Liught & Wonder, the successor company to the gambling tech firm Scientific Games.

He said there are lingering concerns, particularly among some state legislators, that internet gambling could cannibalize revenue and customers from brick-and-mortar casinos — even though the gambling industry itself has established that has not been the case.

Casinos initially had the same concerns when New Jersey launched internet gambling in November of 2013. Luisa Woods, vice president of Delaware North, the gambling, hospitality, and sports company that owns casinos in New York, Arizona, Arkansas, Florida, West Virginia, and Ohio, said that, “My first job was selling the company that I am not here to compete with your business; I’m here to help it grow. We integrated the brand, we created loyalty accounts for every single remote customer. We had people who would show up at the property for the first time and have a host already assigned to them.”

Woods previously was head of digital operations for Atlantic City’s Tropicana casino in 2013. 

This anticipated wave of online casino expansion rests especially in New York. While nothing is certain regarding the potential future of New York online casinos, many executives firmly believe that the Empire State will be part of the next wave of states to further expand regulated online gambling.

Panelists at the East Coast Gaming Congress predict that New York — along with Indiana, Illinois, and Iowa — will launch online casino gaming in the near future, thanks to an already established (and successful) online NY sports betting industry.

“They already have regulators in place,” said Richard Schwartz, CEO of Rush Street Interactive, which owns BetRivers. “They have servers in place. It’s quicker to start up a casino addition.”

While efforts to legalize online casinos in New York fizzled at the end of the most recent legislative session, hope remains that discussions could ramp up toward the end of 2022.

It remains the top priority for Sen. Joe Addabbo, who aims to have New York online casinos included in the 2023-24 New York State budget. Lawmakers hope to open discussions later this year and get the issue in the governor’s January Executive Budget.

“We’re laying the foundation really for next year’s budget,” Addabbo told PlayNY in April. “We’ll have constant conversation about it this year, just to work out the kinks and figure out a roadmap to getting it into the budget next year.”

Online casinos and poker rooms could help sustain the New York sports betting industry. Bill Pascrell III of Princeton Public Affairs Group told PlayNY in June that “existing sports betting operators in New York are “dying on a vine” due to the high tax rate.” He noted that New York online sports betting is “just not sustainable at that tax rate.”

Integrating online casinos and poker with the already widespread sports betting market could help to shore up such losses in markets such as New York while expanding the opportunities for gamblers nationwide.