The Global Gaming Expo, G2E, just ended in Las Vegas, with more than 25,000 people attending.
As they do every year, the slot companies brought out their big guns and the new games are sure to take the industry by storm. Or not. It is a crapshoot. Only real-time play on the slot floor will reveal which new games succeed and which go into the scrap heap.
Besides the slot manufacturers and other exhibitors on the exhibit floor were the panels of experts discussing the issues that are key to the gaming industry in 2023: sports betting, Indian gaming, smoking, cyberattacks, women in leadership roles, slot demographics, slot influencers, and the health of Las Vegas, gaming, the economy, and igaming. The headline grabbers for the year were the NFL-branded slot machines, cyberattacks, and sports wagering.
It would be hard to match sports. Since the Supreme Court decision in 2018, betting on sports has exploded, generating $261 billion in wagers, $21 billion in gross gaming win, and $3.8 billion in state and local taxes.
Those numbers do not include the states where Indian tribes have an exclusive. In those states, the numbers are not public information. More than 30 states have legal sports wagering and 27 reported results for August; the handle was $6.6 billion and the GGR $600.5 million. Six states reported igaming in August and $519 million. In 32 months, igaming generated $12.4 billion in GGR; that comes from 2021, 2022, and eight months of 2023. Handle, or the amount of the wagers, is probably about $120 billion for that same period.
For most people, igaming flies below the radar. It is legal in only six states and no new states have joined the gang since Michigan in January 2021 and Connecticut in October of the same year. The failure of new states to legalize online gaming is confusing and hard to understand. Igaming has been very successful in those six states, producing significant tax revenues. At the same time, sports betting has spread across the country like wildfire. Why not igaming? The folks on the panel for “What’s Next for Legal iGaming in the United States” at G2E think that will change.
Light & Wonder Head of Government Affairs and Legislative Counsel Howard Glaser said, “Igaming has been the most productive revenue generator of any gaming launch in history.” A bold claim. Glasser says that it took casino gaming 30 years to reach the same level of revenue and it takes 30 sports-betting states to produce what six igaming states generate. He is on the mark, which adds to the difficulty in understanding why more states have not signed up. Another panelist thinks an even more compelling reason to legalize igaming is that everyone in the country is online.
Anika Howard, president and CEO of Wondr Nation, said, “Right now, digital, from a player perspective, is an expectation. There are all of these things you can do in your traditional life with your mobile phone.”
She has a point. It is possible to do almost anything from a mobile phone, including playing games. Who could argue against gambling being a logical next step? Everything is for sale online, on mobile devices. You interact with friends, meet new people, and work. You can buy groceries, medications, clothing, cars, books, music, and, well, you can even bet on a sporting event in about half of the country, all right there on your phone. With all the tax revenue to be made and a population already conditioned to this medium, what is holding igaming back from spreading to 10, 20, or even 30 states as casinos, lotteries, and sports betting have done?
Lawmakers in Indiana, Illinois, Louisiana, New York, and other states have discussed it. In particular, states that have seen the before and after of mobile sports wagering, like New York, understand the potential of igaming. New York generates a billion dollars a month in wagers and over $100 million in revenue, half of which goes to taxes. In September, mobile sports wagering in the Empire State generated $1.7 billion in handle, $166.8 million in win, and $84.5 million in taxes. That should make igaming a no-brainer in New York. Besides New York, the success of igaming in Michigan, New Jersey, and Pennsylvania is obvious to any observer. Producing significant revenues and taxes month in and out, igaming revenue is growing by double digits each month.
With that background, igaming should be on verge of a breakout. There is something for everyone: tax revenue for the politicians, a new revenue stream for the operators, and the convenience that mobile phone users have come to expect. So what is holding it back?
Sex is part of the answer. Igaming lacks the sexiness of sports betting. Wagering on sports betting is sucking the air out of the room. Famous athletes and their beautiful girlfriends do not melt into the igaming narrative the way they do with sports. Sports with its heroes and villains, winners and losers, is glorious, a media bonanza; igaming lacks the glamor, the daily media narrative, and the stars.
Another issue may be one of the factors keeping igaming from expanding. In its purest form, internet gambling takes a casino straight into the life of the gambler. It is not necessary to dress, leave the house, or interact with a live human. Sitting alone in the dark, the gambler can play until the money runs out. For those at risk, subject to addictions, this is the worst possible scenario. That single factor is enough to cause some lawmakers to think of the consequences of legalizing online gambling; it is too accessible.
It is not likely that caution will win out in the long run. In the long run, the G2E panelists will be right, igaming will expand. It may be slower than the sports tidal wave, but it will happen.
