A split in the gaming industry over online casinos slows iGaming as revenue leaders push expansion and regional operators fight to protect casinos
A gambling industry split over online casinos slows iGaming as online revenue leaders push expansion and regional operators fight to protect brick-and-mortar casinos.A gambling industry split over online casinos slows iGaming as mobile revenue leaders push to expand while regional operators fight to protect brick-and-mortar casinos.
American gaming stakeholders have for years largely agreed online betting will shape the industry’s future. The structure of that mobile gambling future is far more divisive.The U.S. gaming industry is deeply divided over real-money online casino gaming, with digital giants like FanDuel and DraftKings supporting expansion and many regional operators opposing it. Opponents, including Cordish and Churchill Downs, argue iGaming could harm brick-and-mortar casinos, jobs, and local economies, while supporters say it can help curb unregulated gambling and increase state revenue. This internal division stalled legislative progress, preventing iGaming from gaining the broad support that helped legalize sports betting in dozens of states. Current, former and potential online gambling entities are strongly divided about which types of games should be allowed. Disparate factions have formed trade groups, hired lobbyists and tried to shape public opinion around real money slots and table games played on phones and laptops. The lines, not surprisingly, are predominantly based on each stakeholder’s financial interests. How these competing interests' existence plays out in statehouses and courthouses in the U.S. will determine the allocation of hundreds of billions in potential gambling dollars for years to come.U.S. jurisdictions could legalize real money online casino gaming before the 2018 Supreme Court decision that overturned the federal sports betting ban. 39 states since legalized sports betting or approved laws to do so. Seven allow real money casinos, and only four states launched iGaming following the Court’s sports betting decision.gaming, which critics decried as a “slot machine in every pocket,” sparked greater problem gambling fears and is far less politically palatable among both Republicans and Democrats.The COVID-19 pandemic onset in 2020 and shutdown of practically all the nation’s 1,000 brick-and-mortar casinos reinvigorated gaming operators’ efforts to reach an increasingly digital customer base. The U.S.' largest retail gaming companies including BetMGM, Caesars, Wynn, Churchill Downs and PENN National all invested hundreds of millions in newly legalized online sportsbooks, as well as digital slots and table games. In the years following the pandemic, two digital operators cemented themselves as the clear leaders in American online gaming. DraftKings, publicly traded in late 2020, and FanDuel, acquired by European gaming giant Flutter Entertainment in 2018, now take in roughly three-fourths of all U.S. digital iGaming and sports betting money. The two daily fantasy sports pioneers emerged from a crowded field of more established gaming companies largely due to existing online-based customers and industry-leading sportsbook offers, most notably same-game parlays. Though parlays helped sportsbooks nearly double their profit margins since 2018, online casino games still generate roughly 2.5 times as much operator revenue as sportsbooks in states where both game types are legal. Since DraftKings and FanDuel cemented a de facto digital duopoly by 2023, the gaming industry became increasingly fragmented about its online future.bills in more than two dozen statehouses. Caesars and BetMGM typically joined them, investing billions into their online platforms and tout iGaming as a significant future revenue driver. They’ve argued these for-cash games are readily available via unregulated offshore sites, as well as hundreds of free-to-play and “freemium” social and slots casinos. These offshore and unregulated platforms don’t offer player protections, real money iGaming proponents argue, and don’t pay state and federal taxes on their profits. Opposition from within the industry is most prominently from smaller regional operators that pivoted away from iGaming. Cordish Companies, which operates around a dozen brick-and-mortar casinos, and Churchill Downs, owner of many of the country’s best-known horse tracks and hybrid “racinos”, are among the most notable names in a trade group of more than a dozen regional casino operators working to stop real money casino gaming expansion. Along with problem gambling, the National Association Against iGaming argued digital gaming will hurt existing brick-and-mortars, threatening job opportunities and local economies.during a panel: not all forms of online wagering are the same. Equating regulated pari-mutuel horse racing with 24/7 casino-style iGaming misrepresents both the law and the lived experience of gambling harm.…Cannibalization, or how much money is lost from in-person gaming to digital offerings, has been one of the industry’s largest sticking points. Supporters and opponents use corporate-commissioned studies, executive testimonies, financial reports and anecdotal evidence to argue their case. Wynn, the third-largest casino operator on the Las Vegas Strip and a former online gaming and sportsbook company, hasn't taken a public corporate stance on legal iGaming. Penn, which operates the U.S.' largest portfolio of regional casinos, supported iGaming in jurisdictions such as its home state of Pennsylvania but opposed expansion in some other markets. What’s clear is that digital-focused or digital-only operators have far less to lose by a decrease in brick-and-mortar gambling revenues.Without widespread gambling industry support, commonplace during sports betting legalization discussions, it's far harder to build momentum for regulated iCasinos. Companies such as Cordish and Churchill have nevertheless helped thwart iGaming expansion. Proponents maintain the thousands of unregulated digital casinos indicate consumer demand and that states should take steps to protect players and generate tax dollars like they did with black market sports betting. With states facing greater economic uncertainty, advocates also say these high-revenue-generating online slots and table before lawmakers in recent years. It remains to be seen how iGaming will be received in 2026 when most state legislatures begin their respective sessions. Ryan is a Senior Editor at Covers reporting on gaming industry legislative, regulatory, corporate, and financial news. He has reported on gaming since the Supreme Court struck down the federal sports wagering ban in 2018. His work has been cited by the New York Daily News, Chicago Tribune, Miami Herald, and dozens of other publications. He is a frequent guest on podcasts, radio programs, and television shows across the US. Based in Tampa, Ryan graduated from the University of Florida with a major in Journalism and a minor in Sport Management. The Associated Press Sports Editors Association recognized him for his coverage of the 2019 Colorado sports betting ballot referendum as well as his contributions to a first-anniversary retrospective on the aftermath of the federal wagering ban repeal. Before reporting on gaming, Ryan was a sports and political journalist in Florida and Virginia. He covered Vice Presidential nominee Tim Kaine and the rest of the Virginia Congressional delegation during the 2016 election cycle. He also worked as Sports Editor of the Chiefland Citizen and Digital Editor for the Sarasota Observer.If you choose to make use of any information on this website including online sports betting services from any websites that may be featured on this website, we strongly recommend that you carefully check your local laws before doing so.It is your sole responsibility to understand your local laws and observe them strictly.Covers does not provide any advice or guidance as to the legality of online sports betting or other online gambling activities within your jurisdiction and you are responsible for complying with laws that are applicable to you in your relevant locality.Covers disclaims all liability associated with your use of this website and use of any information contained on it.As a condition of using this website, you agree to hold the owner of this website harmless from any claims arising from your use of any services on any third party website that may be featured by Covers.
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