Igaming – Where do we go from here?

Igaming – Where do we go from here?

  • Ken Adams, CDC Gaming Reports
October 24, 2021 8:42 PM
  • Ken Adams, CDC Gaming Reports

As gaming expands and matures, its addictive nature will become more apparent.

Not everyone is at risk. The exact percentage of people who gamble and are at-risk is a matter of debate. The extreme estimate is 15 to 20 percent of people who place a wager are subject to becoming addicted. Most academic studies put the number closer to 5 to10 percent. When gambling in the United States was limited to Nevada and Atlantic City, the at-risk population was small, not unimportant, but small.

The rest of the country was protected from the possibility of addiction by distance. If they did not travel to Nevada or New Jersey, they were safe. Lotteries and horse racing did exist, but were less dangerous. Lotteries are too slow and it is too long between outcomes to entice people to overindulge, and horse racing is an acquired taste that does not attract many outside of the loyalist club. Until the 1990s, that was the state of affairs; gambling was known to be addictive to some people. However, for the most part, those people were protected by the divide between them the temptation. That is no longer the case.

It is no secret that since 1988, casino and other forms of gaming have been expanding at the same rate as the universe. After 30 years of expansion, casino gaming is slowing, but it has not stopped. Earlier in the year, Alaska, Hawaii, and Texas made a run at casino legislation, but came up short. Currently, Alabama, Arkansas, Georgia, and Virginia are working their way through the legalization process. Illinois, Indiana, Pennsylvania, and New York are adding casinos.

A composite created by CDC Gaming Reports from Shutterstock images

The real growth that has taken place in the last couple of years has been in sports and igaming. In August, 20 states reported sports betting revenue and five states igaming. Arizona and Connecticut have joined the ranks of both segments, but have not reported any data yet. Through September, igaming has produced $2.3 billion in taxable gross gaming revenue. Sports has not finished reporting for September, but through the end of August, $26.9 billion had been wagered, producing $2.1 billion in GGR. Including an estimate for September, nine months of sports wagering had over $30 billion wagered and $2.5 billion in revenue. The igaming results constitute the win, not the handle; the actual handle, or amount bet on igaming, is likely to have been more than $200 billion. That implies that for the 2021 calendar year, more than $400 billion will have been wagered remotely. It will probably be closer to $800 billion in 2022.

Both igaming and sports betting are barely two years old. The growth in those two years has been nothing short of spectacular. In fact, the numbers are so stunning that sports and igaming are reshaping the entire industry in their own image. The top-tier national gaming companies have spent the last year on a buying, merger, and partnership spree. Each has created a new division exclusively to operate in the new arena. Sports betting is sexy bit, it has become the main topic of conversation in the world of sports and with the sports media. It is legal to talk about the odds and proposition during games. In fact, the fastest growing part of sports betting is the single-game parlay. By one estimate, 40 percent of all sports wagers in September were made on single-game parlays.

People like to watch the game and bet. In the states with online or mobile sports, those bets are 90 percent of total wagers. For those making a profit from the expansion, it is Katie bar the door and go for every opportunity that presents itself.

As with all good things, there is another side to this surge in gambling on sports and online. And that, of course, are the people harmed by it. Whether it is 5 percent or 20 percent, a significant number of the people betting online and on sports are at risk.

University of Nevada—Reno Professor William Eadington produced some of the first studies on problem gambling. He began doing research on the subject in the late 1970s and early 1980s. Bill studied and taught casino gaming for nearly four decades. He was an industry supporter, but felt that as part of good public policy, access to gambling should be restricted. Professor Eadington always recommended that casinos be kept away from population centers. It was a 20th century argument.

In the 21st century with legalized gambling on the internet, there is no way to isolate the activity. So how are we to protect the at-risk population in the new era?

In Europe and Australia, two approaches have been tried. The first is to limit or forbid advertising by gaming companies. The second is to limit maximum bets and time on device and to set limits on the amount of money a person can lose. Increasing the protection for the vulnerable is an ongoing process in many countries.

It may be years before we in the U.S. are forced to consider such measures. But with the increased availability, the number of people whose lives are damaged by gambling is going to grow. Problem gaming will eventually be recognized as a national health issue. We should start thinking about the appropriate protection measures now before the problem gets to epidemic proportions. It would be nice to have Bill Eadington’s voice to help us plan for a future that includes igaming everywhere. It will not be a simple, easy, or pain-free process.