Senior Land-Based Gaming Executives Unite to Oppose iGaming
A coalition of senior executives from leading land-based gaming companies, including Churchill Downs, Monarch Casino & Resort, and The Cordish Companies has launched the National Association Against iGaming (NAAiG).
LISTEN TO THIS ARTICLE:NAAiG was founded to stop the spread of iGaming legalization in the United States. The Association's top advocacy goals include enhancing consumer protection through stricter regulations and oversight and preventing iGaming expansion to mitigate job losses, addiction, and financial instability.
The Association also wants to encourage visits to land-based venues, which boost local economies and offer inherent safety measures. They also aim to educate policymakers about the dangers of iGaming.
Beyond the lack of any real upside for states, iGaming puts vulnerable individuals at greater risk of problem gambling and financial instability. NAAiG is uniting stakeholders to push back and stop the spread of these harmful trends and advocate for responsible gaming policies.
Report Highlights Unitended Consequences
To mark its launch, the Association published a report titled 'Economic Impacts of iGaming Expansion,' conducted by research firm The Innovation Group.
The published study presents a damning assessment of iGaming expansion, citing limited economic benefits and significant negative consequences.
According to the report, a key benefit of iGaming legalization is the potential for states to increase their gaming tax revenue. It noted the recent tax rate recommendation of the National Council of Legislators from Gaming States of 15-25%.
However, it warns that higher tax rates may hinder operators' ability to invest in key areas like compliance, player acquisition, and technological advancements, which are vital for competing with unregulated operators.
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iGaming’s Cannibalization Effect
The report also touches on the cannibalization of land-based gaming revenue by iGaming. It indicates that brick-and-mortar casino revenue underperforms by 16.5% after iGaming is legalized.
This figure is based on a comparison of iGaming states, which experienced a 4.3% drop in retail revenue, and non-iGaming states, which saw a 12.2% increase in retail revenue over the past five years. The report warns that the cannibalization effect may worsen as the industry transitions online and younger, digitally-savvy customers become the norm.
According to the NAAiG, a 16% decline in revenue would trigger substantial job losses, hundreds of millions of dollars in lost economic activity, and decreased tax revenues, ultimately affecting public services and community well-being.
Gambling Addiction and Economic Decline
Furthermore, the study suggests that increased legalization of iGaming could lead to social costs like increased gambling addiction rates and job displacement, with governments facing potential annual costs of over $100 million, plus additional economic losses.
NAAiG notes that 81% of individuals struggling with gambling addiction participate in online gaming, and online gamblers are eight times more likely to experience compulsive gambling issues.
The report also reveals that in regions where iGaming is permitted, household investments have dropped by 14%.
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