Online sports betting is legal in 30 US states, Washington DC, and Puerto Rico. However, only six states offer legal online casinos.
So why is there such a large discrepancy between legal online casino gambling and online sports betting?
While we are still determining how long it will take for the industry to catch up, we can speculate as to what’s taking so long.
Today, we will explain why online casino regulation continues at a snail’s pace compared to sports betting.
Key Highlights
- 30 US states have legal sports betting, while only 6 have legal online casino gambling.
- Younger people are accustomed to living off their phones, making iGaming inevitable.
- Sports betting is a more casual betting activity than online gambling.
Why Sports Betting Continues to Outpace US Online Casino Regulation
A common argument against iGaming in states where casinos are legal is that iGaming will cannibalize casino revenue.
The fear is that players will stay home rather than go to the casino. However, this differs in states like New Jersey, which saw iGaming help rebuild its struggling casino industry.
Casino States Fear iGaming Will Cannibalize Brick-and-Mortar Gaming
Casinos saw an increase in in-person gambling in 2022 by 9%, contrary to cannibalization fears.
A panel discussed this issue at the 2023 East Coast Gaming Congress. Howard Glaser1 with Light & Wonder said that casinos are unwilling to give iGaming companies a foothold.
They view these companies as “an existential threat. There’s a fight for dominance within the casino industry about who gets growth.”
Nearly every state with casinos will use the cannibalization argument, and some will even find evidence to back up these claims. This slows the process and, in some cases, stalls the progress of online casino legislation.
There’s a fight for dominance within the casino industry about who gets growth.
– Howard Glaser, Global Head of Government Affairs and Legislative Counsel at Light & Wonder
Republican Legislatures Are Less Likely to Pass Gambling Expansion
Another reality is that around 65% of states have Republican-controlled legislatures. Historically, Republicans have opposed gambling expansion in any form. While it is not impossible to get a gambling bill passed in a Republican-controlled state, the path to passage is usually tricky. If a bill passes, it is generally limited to in-person forms of gambling, such as the lottery.
Republicans tend to promote “traditional family values,” and online gambling expansion does not fall within this view. Online gambling also has a stigma attached to it due to its early roots and lack of control in some areas of the world. While many of the stigmas attached to gambling are outdated, they are often used to try and convince constituents that online gambling is a “bad bet.”
Millennials Still Need to Rise to Power
If you examine Congress closely, you’ll see that Baby Boomers and Gen Xers are in power. While these groups are familiar with technology, it is not engrained in their everyday lives like Millennials and Gen Z.
Bally Corp President Elizabeth Suever2 addressed the issue in May at the SBC Summit North America. She stated, “Once you get to millennials, people are comfortable basically running their entire lives off their cell phones. This is where gaming is going.”
As Baby Boomers and Gen Xers start to phase out of positions of power, those more accustomed to an online lifestyle will likely consider options like iGaming for tax revenue. While some will still argue tired troupes like cannibalization and money laundering, there will be more that understand that online gambling is the next evolution of gaming.
Once you get to millennials, people are comfortable basically running their entire life off their cell phone. This is where gaming is going
– Elizabeth Suever, Bally Corp President
Sports Betting is Not the Same as Casino Gambling
When it comes down to it, sports betting is not considered the same as online casino gambling.
For starters, the outcome of sports bets depends on the performance of athletes and the bettor’s ability to make accurate choices. It is unlike casino gambling, where most action depends on random chance.
Secondly, sports betting is considered more skillful than casino gambling. Bettors can study and make educated decisions on what to bet on. If you know that a team has its start players out due to injury, you have a better understanding of their odds of winning. With a casino game, each round is chance-based, and there is a fixed house edge that you cannot defeat.
Lastly, sports betting is more of a casual activity than casino gambling. Players set their bets and enjoy the game, and they aren’t forced to constantly engage and undergo the constant ups and downs associated with casino gambling. Sports betting attracts a much more casual clientèle who wants to have extra fun while watching their favorite teams.
Sources
1 https://apnews.com/article/internet-gambling-casinos-atlantic-city-db3fa7e38d4fb38b98c9031b46ca5e04
2 https://www.usnews.com/news/us/articles/2024-05-08/slow-to-expand-internet-casino-gambling-is-the-future-of-us-betting-industry-execs-say
