The author of a study that spoke of job losses, economic hits, and potential social ills from online gaming has defended his 78-page report.
Brian Wyman, executive vice president of operations and data analytics with the Innovation Group, dismissed suggestions of bias and that the research was flawed or made faulty assumptions.
“I take issue with anybody painting us as anti-igaming or anti-gaming,” Wyman said. “We’ve been an industry stalwart for 30 years. We work with nearly every tribe, plus commercial casinos, banks, state governments, and lotteries. We do no-nonsense economic analysis. It’s not like it was a secret to us who our client was and what they were going to use our analysis for, but that doesn’t mean it was a biased analysis.”
The report was released last month by the newly formed National Association Against iGaming, a group of casino partners that includes the Cordish Companies, Red Rock Resorts, Monarch Casino & Resort, Churchill Downs Incorporated, Jack Entertainment, Accel Entertainment distributive gaming, and Foundation Gaming.
The American Gaming Association has stayed on the sidelines between its members fighting over the issue.
It troubles Wyman that many in the industry maintain there’s no cannibalization and that igaming doesn’t harm casinos. Pro-igaming forces need a compelling narrative, because saying there’s no harm to casinos and no job losses “doesn’t pass the smell test.
“We haven’t said once that igaming is bad and haven’t ignored the benefits of omnichannel at all,” Wyman said. “All we’re saying is some people funnel some of their money today into casinos, then spend it online later. The way we establish how much revenue flows away from the casino is by comparing the igaming and non-igaming states in our set. My only dog in this fight is making sure legislators understand what choice they’re making and that they’re not operating with BS.”
Pushback on the study has come from such igaming proponents as DraftKings, FanDuel, Light & Wonder, Rush Street Interactive, Bet MGM, Boyd Interactive, bet365, Bally’s, and several other members of the iDevelopment and Economic Association (iDEA), a seven-year-old trade association of gaming operators and suppliers advocating for growth through regulated online gaming.
“By embracing digital gaming, they are modernizing their offerings, engaging new customers, and reinvesting in their physical properties and employees,” the group said in a statement. “Opposition to igaming is both misguided and misinformed, ignoring the realities of consumer demand and the benefits of a well-regulated online marketplace for the overall gaming ecosystem.”
Many land-based operators see igaming as a complementary product, said John Pappas, a casino industry consultant and state advocacy director for iDEA. He only heard of the newly formed anti-gaming group this winter at a hearing in Indiana and subsequently at a one last month in Maryland ahead of the release of the study.
“When you see companies against it that are deeply involved in online gambling and profiting from it, it seems like an inconsistent position to take,” said Pappas.
Wyman said the analysis speaks for itself and was an expansion of work Innovation did in 2023 for the Maryland Lottery & Gaming Commission, showing similar negative impacts from igaming, especially when it comes to jobs.
“That began this conversation. Operators looking to quash igaming bills liked what we said in Maryland and asked us to talk about what this would look like in other states.”
The findings show land-based casino revenue drops by 16% on average after igaming is introduced, which in turn leads to substantial job losses, hundreds of millions of dollars in lost economic output, and reduced tax contributions that fund public services. The study projects nearly 5,000 brick-and-mortar job cuts by 2029 if they legalize igaming: an estimated 2,818 jobs lost in Ohio, 2,642 in Louisiana, and 1,906 in Mississippi.
All states analyzed would see massive GDP reductions, including Ohio ($602 million), Indiana ($428 million), Maryland ($372 million), and Colorado ($313 million).
States with igaming experience an 8.3% decline in distributed gaming revenue, impacting taverns and small gaming establishments.
As for harm to individuals, the study said 81% of gambling addicts engage in online gaming, making addiction harder to control. Online gamblers are eight times more likely to report compulsive gambling. Underage gambling increases; 26.4% of adolescents that engage in igaming develop gambling disorders, the study said.
Wyman said that the companies that figure out their omnichannel strategy will win the day. Those with the best strategies may benefit, while the smaller operators without the money to invest will be harmed.
“MGM and Caesars can invest substantial dollars in igaming platforms, because they can amortize their costs over every state they operate in,” Wyman said.
Wyman said that the critics should do their own deep dive before passing judgment.
“We tried to be balanced,” Wyman said “and to err on the conservative side. Anybody who digs will find our choices were incredibly reasonable.”
As for problem gaming, Wyman said they discussed only what’s out there in the public space already and that some of the recent research raises questions about putting a casino in everyone’s pocket. It’s not unreasonable for a legislator to consider the impact.
“We tried very hard to not say definitively that igaming will increase the number of problem gamblers by x, y, or z. I don’t think we can say that conclusively. What I can say is the body of research from major institutions and reputable sources show people gambling land-based and online have a higher propensity for disordered gambling compared to people who gamble only online or only in casinos. We summarized those later in the report. They’re omitted in the executive summary, because we wanted to be careful not to paint a picture and make assumptions that we didn’t think we could justify.”
Pro-igaming executives respond
Pappas said they had Eilers & Krejcik Gaming do a report on Innovation’s Maryland study, which cited inconsistencies in the methodology that would undermine its findings. The counter study said online casinos attract different customers than land-based casinos, players who tend to be moderately younger and are more likely to be male. Playing online requires less time and allows for play at lower stakes, it said.
“Casino operators haven’t observed cannibalization,” the counter study said. “We conducted a survey of casino operators with both land-based and online products and 100% of them stated that their land-based revenue either ‘stayed roughly the same’ or ‘moderately increased’ following the introduction of online casino play. No one we spoke to believed that their online casino revenue had cannibalized their land-based casino revenue.”
The study said land-based casino markets all showed positive change after an online casino was introduced and compared with land-based-only states, casino markets with online gaming performed better.
The anti-igaming group is urging businesses, policymakers, and community leaders to push back against its expansion and states have been reluctant to expand igaming out of concerns, in part raised by the study.
“There are a lot of differences of opinions from entrenched stakeholders,” Pappas said on the limited expansion of igaming so far. “When we saw the expansion of sports betting, we went from a market of zero essentially to where everybody could participate. With igaming, there are a lot more entrenched stakeholders with differing opinions. That makes it more difficult to get through these debates,” especially with the anti-igaming group “muddying the waters. This organization is a straw man. I’m not too concerned.”
iDEA said forming a group to oppose regulated online gaming doesn’t change the fact that millions of Americans are gambling online through illegal unregulated operators that offer no consumer protections, responsible-gaming safeguards, or tax contributions to the states.
“The real risk to consumers and state economies isn’t the expansion of legal igaming; it’s the unchecked growth of the illegal and unregulated online gaming market, which thrives in the absence of legal alternatives,” the group said.
Confounding to Pappas is that some of the operators opposing igaming, such as Cordish and Churchill Downs, are deeply involved in online gaming themselves. Cordish has its own PlayLive! branded online casino.
“In Maryland, Cordish is partnered with the leading online sports betting platform in the state,” Pappas said. “Does it seem odd that they would make these statements, while also being the biggest enablers of igaming?”
Cordish has consistently opposed igaming in all states where it operates, but engages in it in Pennsylvania where the law was enacted before the properties opened, according to Mark Stewart, the operator’s executive vice president and general counsel in a previous interview with CDC Gaming.
Churchill Downs is also deeply involved in online gambling, both directly and indirectly, Pappas said. In July, their Pennsylvania casino announced a partnership with Bet365. In Kentucky, their horse racing license monetizes partnerships to offer online sports betting.
“Separately, but maybe with even more significance, is the fact that they own and operate TwinSpires.com, the nation’s largest online horse wagering platform,” Pappas said. “How do they reconcile that with accepting wags 24/7 through a mobile app?”
Shannon McCracken, senior director of government relations at Churchill Downs, said in an interview the operator has brick-and-mortar operations in 14 states and has talked about the threat of igaming for the last couple of years when proposed legislation arose in states. She said there’s a “data-desert” when it comes to cannibalization data the group tried to address with its new study.
“We watched the evolution of igaming in other countries and saw the policy regrets and rollbacks. England put limits based on your income,” McCracken said. “We also witnessed the direct cannibalization in our Pennsylvania operation (Presque Isle Downs & Casino in Erie) but we didn’t have the data. Presque Isle lost 250 jobs.”
That’s why Churchill sold its market-access rights to bet365 in January 2023. They aren’t involved, but the law requires igaming to be connected to a land-based operation, she said.
McCracken said any argument that there’s illegal gaming doesn’t mean lawmakers should legalize it.
“With sports betting, lawmakers thought they were doing something for their constituents. With igaming, they’re afraid of doing something to them. People who’ve seen the revenue numbers and are leaning toward supporting it still talk about the social impacts. Even in the online sports betting market, there’s impact on young men. That causes (lawmakers) the most pause.”
McCracken said she’s not seeing igaming expansion passing in any states at this time, because it hasn’t delivered on its promises.
“If igaming was truly delivering on all the promises the industry made on revenues, consumer protections and economic benefits, why is it legal in so few states,” McCracken said. “Why is it so difficult to pass? Despite years of lobbying, only a handful of states have adopted it and many have outright rejected it.”
Jessica Fell, vice president of regulatory affairs and compliance for OpenBet, a B2B sportsbook and igaming supplier working around the world, said she can’t speak to the methodology of the Innovation Group study, but from what they’ve seen globally, players want legal and regulated operators. That means providing the products and services they’re used to seeing in land-based properties and without those, they’ll go somewhere else.
“It’s easy for these players to be fooled by offshore illegal operators and it’s not fair or safe.”
Wyman said he’s seen studies that show legalized online gaming hasn’t impacted offshore wagering at all. Legal marijuana didn’t stop illegal weed dealers and even bookies are going strong today where there’s legalized sports betting. “It’s an important conversation, but I don’t think it impacts the conclusions we drew in the report. There’s a threat to the industry with unregulated gambling, but it doesn’t change the results of our study.”
Fell said this is a digital world. People are accustomed to doing so much on their phones and the gaming industry should have a part of that too. “We want to be a modern entertainment industry. We want players to see gaming as a retail and digital opportunity for them. That creates cross selling and reaches new players. It’s an avenue for growth for everyone.”
As for the impact the new group will have, Fell said policy makers will weigh the pros and cons and be driven around creating tax revenue. Igaming won’t be a priority for state lawmakers in 2025, but that will change in the next couple of years as states look for new sources of revenue. “The industry needs to face it square on, but our industry has been community leaders providing jobs and tax revenue,” Fell said. “That power is very important.”
Responsible gaming part of the equation
Brianne Doura-Schawohl, a responsible-gaming expert and CEO of Doura-Schawohl Consulting who works with the Campaign for Fairer Gambling, said a recently filed bill in Maryland to repeal sports wagering is an indicator of what’s happening. Although the bill won’t likely go anywhere, Maryland is one of those states that didn’t budget for responsible gaming with expansion.
“It’s starting to show signs how policymakers feel, that maybe the wool was pulled over their eyes (by the gaming industry),” Doura-Schawohl said. “That the expansion wasn’t going to be as easy as was promised. They’re having buyer’s remorse for what was already authorized. I think it does get harder (to expand). I’m not anti-gambling and anti-legalization. What I’m against are policies built on one-sided arguments. As hard as it is for the other side to listen, some facts must be considered before votes are made. I feel the debate is just getting started. They have a voice and real perspective that should be heard.”
States didn’t budget for social harms that would result from online sports betting and allowed deductions for marketing and promotions, measures that are linked to an increase in harm, Doura-Schawhol said. It’s that important lawmakers get information from both sides of the argument. Tax revenue can be significant, but social harm comes with it, along with cannibalization in other industries that leads to job losses.
“You can’t rely on gambling to fund important basics within your jurisdiction because costs will inevitably increase and then you will have to rely on your people to gamble more to keep up with the rising costs,” Doura-Schawohl said. “We know the more people engage with addictive products, addiction rates go with it, and we have to account for those costs. That was accelerated with sports betting and the same would happen with igaming.”
Fell said the systems are in place to track a person’s gaming online and reach out to them if there’s a problem and placing limits or excluding them as part of responsible-gaming measures that wouldn’t be in place offshore. Responsible-gambling measures will become more sophisticated and that will make lawmakers feel comfortable.
