U.S. traditional casinos still dominate despite online gambling growth

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American Gaming Association (AGA) reported that while internet gambling has grown considerably, traditional casinos still dominate the industry in the United States. Internet gambling accounts for only a small fraction of the overall market despite sports betting growth in recent years.

Industry leaders and lawmakers from states that have legalized gambling gathered on Wednesday at the East Coast Gaming Congress in Atlantic City. During the event, they discussed several reasons for the slow expansion of online gambling beyond the few eastern states where it is currently legal.

Possible factors of slow online gambling expansion

Sports betting is available in 33 states and Washington, D.C., yet only six states have legalized online gambling.

While some speculate that fear of losing revenue to brick-and-mortar casinos may hold states back, others, including attorney Lloyd Levenson, find it puzzling.

“It’s a mystery to me why we have 30 or so states that have sports wagering, and only six that allow I-gaming,” Levenson said.

According to Shawn Fluharty, the minority whip of the West Virginia House of Delegates, online gambling generates much more revenue than sports betting, with one month of online casino revenue in his state equivalent to three months of sports betting revenue.

In 2022, internet gambling generated $1.6 billion in New Jersey, marking an increase of over 21 percent from the previous year. The nine casinos in Atlantic City earned almost $2.8 billion from in-person gamblers, a nine percent increase.

Indiana state Senator Jon Ford shared that the state could not pass a similar bill this year due to an analytical report from legislative researchers.

The report revealed concerns that online gambling might significantly influence the revenue of traditional casinos. Ford questioned the report’s validity and planned to reintroduce the bill next year.

Meanwhile, some casino companies hesitate to work with online gambling platforms, viewing them as an existential threat.

“There’s a fight for dominance within the casino industry about who gets growth,” Levenson said.

According to Fluharty, gambling expansion is less likely to receive support, especially in states with Republican-controlled legislatures, which govern around 65 percent of the U.S.

With several federal pandemic-related financial aid ending, however, Fluharty and others said that would likely seek alternative revenue sources to avoid raising taxes. As a result, internet gambling could see a resurgence in interest in many states.