Recent Reports Suggest iCasino Cannibalization Fears Overblown
The fear of brick-and-mortar casino cannibalization has long been cited as a reason why states avoid legalizing online casinos. Two recent reports looking at the potential iCasino markets in Indiana and Maryland suggest those fears are overblown.
The Innovation Group released a study about Maryland’s online casino potential in November of 2023, looking into topics such as possible revenue creation, problem gambling, and brick-and-mortar cannibalization. Spectrum Gaming Group conducted a study in Indiana that was released earlier this month that also took up the issue of cannibalization.
Both studies concluded that retail casino cannibalization fears are overblown.
Cannibalization not a major concern?
Spectrum’s Indiana report cites multiple sources who believe cannibalization concerns shouldn’t be a determining factor in a state avoiding online casino legalization. The report quotes MGM Resorts International CEO William Hornbuckle, who addressed brick-and-mortar cannibalization at a 2021 conference.
“It doesn’t mean [cannibalization] won’t ever happen, but over time we resolutely believe the opportunity to create omnichannel, the opportunity to speak to customers 365 — whether they choose to come in [to casinos] or not — is to the net benefit of organizations doing it at scale,” Hornbuckle said.
A Caesars Casino representative also gave Spectrum information suggesting that iCasino legalization benefitted its retail casino business. The Caesars representative shared that more than half of iGaming players signed up for Caesars Rewards after or on the same day they registered for an online casino account, and more than 4,000 guests made their first casino property visit after registering and wagering on an iCasino account.
The Maryland report suggests retail casino cannibalization fears could be reduced by the state legislature requiring at least some of the state’s online casino licenses to be tethered to the state’s brick-and-mortar casinos. As a result, some of the revenue created by mobile casinos could funnel its way to retail casino businesses.
Maryland legislators have yet to file an online casino bill during the state’s 2024 legislative session, but one is expected to be introduced soon. Indiana legislators aren’t expected to consider iCasino legalization in 2024 but could consider legalization in coming years.