SBA economic analysis shows online gambling will grow total market

In addition to the study, which was conducted by the Analysis Group, 2,389 current and “prospective” gamblers were surveyed.

The study shows that revenue at physical casinos in the legal igaming states of Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia increased by 1.9% following the introduction of online casino.

The study does not break down which land-based casinos consumers visited or show if players were brand loyal.

Among the results of the survey:

• Total gaming revenue in current online casino states was 46% more in 2023 than before online casino went live in those states;
• Land-based casinos in Maryland, where lawmakers are contemplating legal igaming, would bring in an additional $224m in revenue if online casino were made legal;
• Maryland’s total market is projected to grow from $2bn in revenue per year in 2024 to $3.9bn in 2029; and
• Of the legal igaming states, Pennsylvania has seen the most revenue growth since its introduction in 2018. Total gaming revenue in Pennsylvania grew 58.9% between 2018-23.

Online casino increases frequency of gaming, tax revenue

The study revealed that online casino can create new opportunities to increase frequency of gaming, bring tax revenue that is now lost to off-shore or out-of-state platforms back into a state and expand the market due to brand loyalty. This could bring customers from other sectors, like sports betting, onto an online gambling platform.

It also outlined that land-based casinos offer wholly different experiences from online casinos and can attract different audiences.

“The majority of customers who engage in igaming indicate that they have not decreased their land-based casino gaming activity (in terms of both visit frequency and total spend) after starting igaming,” the authors wrote.

Land-based casinos also offer additional activities that some find of interest.

Survey respondents echoed the sentiment: “It’s nice to do it online on a licensed casino app, but it’s also nice to do it at a real casino,” a 41-year-old male from Michigan wrote.

“Because casinos have other activities I would enjoy and there is plenty of stuff to do,” responded a 29-year-old male from New York. “It would make a good vacation.”

From the survey, Analysis Group learned that while 1,118 of respondents had participated in igaming in the last 12 months and 1,188 had participated in online sports betting, at least 64% of those in either category had crossed over to engage in another form of online gambling.

Of those surveyed, Analysis Group polled 200 people from each of the six already legal online gambling states and from each of the five projected legal states. Respondents were all aged 21 or over and said they had gambled in the last year. The online survey ran from 17 January-6 February.

Analysis projection: Revenue could nearly double in five years

Multiple US operators offer online casino and sports betting, including national players BetMGM, Caesars Entertainment, DraftKings, Fanatics and FanDuel and regional players BetRivers and Penn Entertainment. Online casino gives those companies the opportunity to cross promote their online casino and sports betting brands.

When looking at five states that could leglaise online gambling – Illinois, Louisiana, Massachusetts, New York and Virginia – Analysis Group projects that revenue could grow from $5.9bn in 2025 to $10.4bn in 2029.

In current online gambling states, 49.4% of respondents said they visit land-based casinos with the same frequency as before igaming was legal. A total of 26.5% visit brick-and-mortar casinos more often and 18.7% visit them less frequently.

For the five projected igaming states, results were similar, with 49.1% of respondents saying they would continue to visit physical casinos with the same frequency. Meanwhile, 28.3% said they would go more often and 16.8% said they would go less often.

Thoughts echoed by participants in projected online casino states

In terms of how much those surveyed said they spend at land-based casinos, 52.2% of those in legal igaming states said they spend the same as before online casino was introduced, while 26.1% said they now spend more. A total of 16.9% said they now spend less.

Those from the five projected online casino states had similar responses, with 49.4% saying they would expect to spend the same amount of time at land-based casinos while 28.6% said they would likely spend more and 16.5% said they would likely spend less.

The analysis uses what is refers to as a “unique model” to project online gambling revenue based on sports betting due to the similarities between the two. It also provides a comprehensive look at the history of igaming in the states in which it is legal, summarises previous similar studies done between 2008-2024 and culls data from eight sources.

“This study reinforces the empirical evidence regarding the market-expanding effect of igaming on the overall gaming market and the complementary nature of igaming and land-based casinos,” the study reads.