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Land-Based Casinos Are Hurting From the Success of Online Competitors
Deutsche Bank analyst Carlo Santarelli has released a new study showing the effects of online casinos on their land-based counterparts. His findings included an adverse relationship between the two with online establishments coming out on top. Online casinos are evidenced as cannibalizing brick and mortar operators across the states where they are legal. Notable states include New Jersey and Pennsylvania, which both legalized online casino games some years ago. With the current pandemic seriously hurting physical retail and casinos, it seems that many establishments will be unable to recover as their customers flock online. As land-based operators have been forced to close during the lockdown, players have flocked to online establishments that have been carrying on with business as usual.
What The Study Shows
It was reported that traditional casino gross gaming revenue in New Jersey dropped by 17% in March and 9% in April of 2021. In Pennsylvania, the fall was 22% in March, but up 1% in April. This is compared to results from 2019. On the other hand, the gross gaming revenue for online casinos in New Jersey has been consistently climbing. January 2021 saw revenues roll past the $100 million for the first time. The difference between March of 2019 and March 2021 is over $70 million. What drew the most concern was when regulated online casino markets were compared with non-regulated markets in the US. States without online gambling legislation like Ohio, Iowa and Missouri all saw a rise in traditional casino gross gaming revenue. Iowa was as much as 30% with Missouri at 23%. This just shows how big the disparity is between the two market types.
Online Casino Legislation In The US
Currently, there are six states that allow their residents to play casino games online in a regulated market. Many industry insiders have been hoping that other US states will begin to regulate their own markets much in the same way that online sports betting has been taken off over the past few years. The issue is that this new study could provide a strong argument against opening up the legislative books. Casino sites could be seen as a threat to the local economy, which is a claim with a lot more legitimacy now there is a study behind it. It should be noted however that this study was related to the US only and the current pandemic will have definitely skewed the results heavily towards online casinos. Regardless, whether this study will have any effect on state gambling laws remains to be seen.