Study Suggests iGaming Can Help Retail Casinos Increase Their Revenue

Article by : Erik Gibbs Feb 16, 2024

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A recent study, commissioned by iDEA Growth and conducted by Eilers & Krejcik Gaming, challenges concerns of online gaming cannibalizing brick-and-mortar casinos. The study suggests that rather than posing a threat, online gaming catalyzes boosting traditional casino revenue.

Jeff Ifrah, Founder and General Counsel of iDEA Growth, highlighted the study’s compelling evidence, emphasizing that online gambling acts as a growth driver, not a competitor to brick-and-mortar establishments.

The research reinforces the belief that legalizing online gambling could have positive economic impacts, encouraging lawmakers to consider potential benefits, including additional tax revenues and consumer protections, by legalizing and regulating online gaming.

The findings highlight a symbiotic relationship between online and land-based gambling, dispelling fears of conflict and emphasizing the potential for mutually reinforcing prosperity in the gaming industry.

EKG’s investigation revealed a crucial oversight in a Deutsche Bank research note and questioned the methodology of an iGaming study by The Innovation Group, which may have failed to consider key factors.

The new study suggests that the introduction of iGaming leads to an average quarterly revenue boost of 2.44% in the six regulated US states. Through meticulous comparison with land-based casino states, EKG’s team found that five out of the six iGaming states consistently outperformed their counterparts.

Managing Director Matt Kaufman noted that a detailed examination of the data reveals a favorable trend for casino markets embracing iGaming. He mentioned that the majority of states with well-established casino markets have witnessed declines in land-based casino revenue throughout this century.

However, those states that introduced iGaming exhibited a more favorable trend, with declines either plateauing or, in some instances, reverting to growth, in stark contrast to their land-based-only counterparts.

Employing advanced mathematical modeling techniques, the EKG team meticulously scrutinized the potential impact of introducing iGaming in states dependent solely on land-based casinos that had yet to legalize the online channel.

The findings of this comprehensive study suggest that, on average, a state could experience a 1.7% annual increase in casino revenue following the introduction of iGaming.

Ifrah expressed the iDEA’s appreciation for these findings, emphasizing the importance of basing the debate on tangible facts and data. He highlighted that the study strengthens their advocacy initiatives in crucial states, anticipating the opportunity to present this information to policymakers.