New Study Warns iGaming May Harm Economy and Society

Since PASPA’s repeal in 2018, sports betting expanded across the United States, and it is now available in nearly 40 states. After the significant traction gained by the activity, lawmakers in several states are considering the expansion of gambling with the addition of online casinos.

Now, a recently founded coalition, consisting of advocates, employees, unions and businesses, opposing the legalization of iGaming, released a new report, highlighting the negative impact the activity may have.

Online Gambling Brings Significant Risks, Harm

The study was conducted by the research and advisory firm that focuses on hospitality, gaming and tourism, The Innovation Group, for the National Association Against iGaming (NAAiG). Notably, the study pointed to the impact of iGaming, predicting it would result in job losses, as well as decreases in revenues for the land-based sector and state taxes. Furthermore, iGaming can result in significant harm, considering that online gamblers are eight times more likely to be affected by compulsive gambling, the study found.

Shannon McCracken, a NAAIG board member and senior director of government relations at Churchill Downs Incorporated, said: “iGaming is eroding our communities.” She warned that not only online gambling results in financial harm, but it also affects family-sustaining jobs.

Jason Gumer, EVP and general counsel at Monarch Casino and Resort, shared similar concerns. “Beyond the lack of any real upside for states, iGaming puts vulnerable individuals at greater risk of problem gambling and financial instability,” he explained. Gumer spoke about NAAiG’s key role of helping unite stakeholders to stop the harmful expansion of online gambling.

Legal iGaming Brings Harm, Results in Losses to Brick-and-Mortar Casinos, the Study Found

The research estimated that states that have introduced online gambling are expected to “face significant economic losses,” with job cuts in thousands by 2029. As an example, the study pointed to New York and Illinois, where job losses by 2029 are expected to hit 4,921 and 4,733 respectively.

Besides job losses, the legalization of online gambling “results in significant losses for states in economic output,” the study suggested. It predicted that massive GDP reductions are expected to impact Ohio, Maryland, Indiana, as well as Colorado.

Equally as important, online gambling may bring significantly more harm when compared to the land-based sector. Per the study, an estimated 81% of people affected by problem gambling engage in iGaming. A negative trend is also observed when it comes to household investments, which have decreased by 14% in jurisdictions where online gambling is legal.

iGaming affects the land-based sector too, primarily due to cannibalization. “Land-based casino revenue drops by 16% on average after iGaming is introduced, leading to substantial job losses, hundreds of millions of dollars in lost economic output and reduced tax contributions that fund public services,” the recently released study warned.

Losses for the brick-and-mortar casinos are expected to soar in the next four years. The study projected that New York’s land-based casinos may record losses of up to $983.7 million by 2029. Similarly, revenue losses in Illinois, Ohio and Maryland are expected to hit $545.3 million, $522.6 million and $342.6 million respectively.