As more states consider legalizing online gaming, some casino workers are pushing back – arguing creating a legalized market could cost them their jobs and see the industry lose revenue and customers.
Some legislators in New York, Maryland, Hawaii, and Wyoming are hoping to join the ranks of states that offer online casino gaming and poker. Some of those efforts are now facing opposition.
“We find it appalling that you are pushing legislation that would hurt workers like us and our industry in order to benefit a handful of companies who are seeking massive profits at our expense,” the New York Hotel and Gaming Trades Council union recently noted in a letter addressing the issue.
Unions Express Concerns
The letter represented employees at Resorts World casino and was aimed at New York state Sen. Joe Addabbo (D), who has favored legalization since 2019 and introduced the latest bill. The casino is adjacent to the senator’s district and many of the employees are in his constituency.
The employees argued that those playing online won’t visit a casino, depriving the property of additional revenue and hurting workers in the process.
“When customers come to a racino, VLT (video lottery terminal) parlor, or casino, they support all of our jobs, including cooks, bartenders, servers, maintenance workers, and hotel workers,” the union noted. “We know that if, instead, they were to game from their homes, workplaces, or elsewhere, their dollars would go straight into the pockets of gaming companies, rather than to support the livelihoods of thousands of New Yorkers who support the state’s gaming industry.”
Workers in Maryland have also expressed opposition as well. Tracy Lingo and Paul Schwab, leaders of the Unite Here union, wrote a letter to the Baltimore Sun criticizing legalization efforts.
“In 2008, Maryland voters approved legalizing casino gaming for the promise of good jobs and economic development,” the union noted. “Online gaming will endanger these economic development opportunities at casinos throughout the state, slashing future job creation.”
New Study Casts Doubt on Casino Worker Concerns
Despite that opposition, a new study from iDEA Growth (iDevelopment and Economic Association), reflects the opposite conclusion – that online gaming actually helps add to live casino revenue while also providing gaming companies with an additional revenue stream.
iDEA is the leading trade association for American online gaming industry and commissioned the study from the gaming firm Eilers & Krejcik Gaming (EKG). As part of the “Comparing Online and Land-based Casino Gaming” project, EKG dissected a research note by Deutsche Bank and a study by The Innovation Group. Researchers found those studies overlooked some key factors and used a flawed methodology when considering potential cannibalization.
“This study offers compelling evidence that online gambling is a catalyst for growth, not a competitor to land-based casinos,” iDEA founder and general counsel Jeff Ifrah said. “The research underscores the conviction that legalizing it drives beneficial economic impact across the industry. As lawmakers consider the merits of legalizing and regulating iGaming, they can be assured that it will complement the land-based casinos to deliver even more tax revenues to their states and establish meaningful consumer protections.”
The study of online and land-based casino revenues actually reveals an average quarterly revenue boost of more than 2.4% from the introduction of iGaming across the six currently-legalized U.S. states.
The EKG team featured economists, data analysts, and industry experts comparing quarterly growth rates of the six legalized states with a selection of land-based only casino states. The report found five of the six iGaming states outperformed the land-based group over the same time periods.
“The closer you look at the data, the better it is for the casino markets that have added iGaming,” EKG managing director Matt Kaufman said. “Nearly all states with mature casino markets have experienced land-based casino declines this century. States that have introduced iGaming have been materially more likely to see that decline flattening, and at times even returning to growth, compared to states with only land-based casinos.”
Mathematical modeling techniques used to study the potential impact of the introduction of iGaming in land-based casino states concluded the typical state would boost casino revenue by 1.7% annually.
The EKG methodology looks at the impact of online casinos on land-based casino revenue in each state that has launched online casinos individually. Researchers say this is a more intuitive approach that shows online casinos have positively impacted land-based revenue. According to the researchers, previous studies double-counted population growth, and included children as part of the potential population of gamblers – creating an “apples-to-oranges” comparison.
The Innovation Group study and the Deutsche Bank research note also didn’t compare time periods before and after each state launched online casinos – limiting the impact of online casino introduction.
“iDEA welcomes these findings so that the debate around iGaming is centered on real facts and data,” Ifrah said. “This study bolsters our advocacy efforts in key states, and we look forward to sharing the information with policymakers.”
