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A new study commissioned by the Indiana Gaming Commission (IGC) has found that online gaming will not cannibalize the state’s existing casino industry.
Spectrum Gaming Group, the company IGC hired to conduct the study, concluded that online casinos and brick-and-mortar casinos could co-exist in Indiana. Spectrum wrote:
“Based on the evidence from the states where igaming has been introduced, there is little, if any, cannibalization of revenue from established casinos. This is particularly true in states where the in-person gaming options are easily accessible to most of the population, such as in Delaware and West Virginia. Based on the results in other igaming states, Spectrum believes implementing igaming in Indiana will have little impact on retail casino gaming revenues in the state.”
The 103-page report covers several other areas of online gaming, including revenue, employment and spend per gambling adult.
Other states serve as test cases for Indiana online gaming
Spectrum analyzed five other states where online casinos or sports betting launched amid retail casino gaming.
Their studies found that two of the five states with casino gaming that launched online gambling saw positive revenue growth from casinos from 2019 to 2021:
- Delaware casinos: 6.7% gross gaming revenue growth
- West Virginia casinos: 1.1% gross gaming revenue growth
Three of the five states saw negative growth:
- New Jersey casinos: -5.6%
- Pennsylvania casinos: -1.7%
- Michigan casinos: -12.9%
The study noted that New Jersey and Michigan were anomalies. New Jersey’s casinos are all located in one area: Atlantic City. So, many gamblers across the state could save time and money by playing online casino games at home.
As for Michigan, the numbers were skewed, the report noted. Spectrum calculated online casino revenue for the entire state, while it only calculated revenue from Detroit commercial casinos.
With New Jersey and Michigan excluded from the results, casino revenue grew an average of 2% across three states.
Online gaming can provide benefits for retail casinos
The report noted that one of the key advantages is that casinos can use online gambling platforms to grow a customer base.
“As noted earlier in this report, when retail casino operators offer iGaming, they can be expected to leverage the digital offering to enhance and grow their land-based revenue by marketing their amenities and their loyalty program to a broader demographic.”
Additionally, Spectrum found that Indiana online casinos that did not include live dealer games would not affect casino employment.
However, if the state chose to add live dealers, it could provide “meaningful employment impacts” as long as the dealing studios are within Indiana.
The state is also in a good position to bring online gambling into its responsible gaming universe. Spectrum noted:
“With a mature casino industry and digital sports betting in place, Indiana is well-positioned to integrate iGaming with its existing responsible gaming measures, although additional funding should be dedicated for treatment services, according to the executive director of the Indiana Council on Problem Gambling.”
