Sports bettors looking for an outlet after most sporting events were canceled initially turned to iGaming, but land-based casino players who tend to be older and more fearful of technology are, surprisingly, driving the increase of online play in the COVID-19 era, according to iGaming executives who spoke Monday at ICE North America’s digital conference.
The executives, along with a Michigan state legislator who authored Internet and sports betting legislation that will bring iGaming to the state, possibly expedited to the fall, said they expect the shutdown of the U.S casino industry that’s slowly reopening to lead to the expansion of full-fledged iGaming beyond the three states where it’s operating (New Jersey, Delaware, and Pennsylvania) and two others where it’s pending (Michigan and West Virginia).
Jesse Chemtob, general manager and vice president of casino for the FanDuel Group that operates in Pennsylvania and New Jersey, said sports bettors initially tried online casinos, but that has decreased over time.
“We’re seeing the trend of more core casino customers trying for the first time,” Chemtob said. “They’re looking for another form of entertainment while they’re home.”
Aviram Alroy, vice president of interactive games for the Mohegan Sun, which also operates in New Jersey and Pennsylvania, said they’ve seen “significant growth, which is no surprise to anyone.” Total iGaming revenue for March 2020 in Pennsylvania, New Jersey, and Delaware added up to $89.6 million, a 20 percent increase over February’s $71.7 million.
“The growth is from people in the brick-and-mortar database, rather than the general public,” Alroy said. “That’s very encouraging for us to know that people who can’t go to the casinos right now aren’t afraid of playing online.”
The two executives said the newfound iGaming play by core players won’t cannibalize casino play, but instead complement it and help fill the void of any future outbreaks or until players feel comfortable to return in person. Because of the pandemic, they expect states, spearheaded by casino companies that don’t have an online play there, to push for its adoption to raise tax revenues and company profits.
That was echoed by Brandt Iden, a Michigan state representative who authored the Lawful Internet & Sports Betting Acts of 2019 that paved the way for sports betting being launched in March (with online sports betting to follow) and iGaming by early 2021.
Iden said rules were recently promulgated for iGaming and to speed up licensing so it can be launched this fall, earlier than expected. Online sports betting is moving along the same track for a similar fall launch, possibly in November.
Michigan tribal casinos are looking to reopen soon, but remain closed with that state’s stay-at-home order in place. In Detroit, which has been hit hard by the coronavirus, casinos may not fully reopen for months.
“We’re trying to capitalize,” Iden said. “It’s a revenue issue every state is going to be dealing with it, and we’re going to have significant budget shortfalls without those gaming dollars that we have to address.”
Moving early with iGaming, however, has its drawbacks, Iden said. Platforms were being built for casinos for implementation in 2021 that would provide consumers with more options than they would get with an early launch, he said. If those casinos didn’t launch in the fall, they would be at a competitive disadvantage despite their efforts, he said.
“Consumers won’t get all the options with an expedited timeline, but it’s important to get a revenue source and even when land-based casinos open, they will have less capacity,” Iden said.
