Expert says iGaming legalization won't be like sports betting

Posted: January 10, 2025, 05:17 pm.

Last updated: January 10, 2025, 05:17 pm.

A new year is here and with it comes optimism that more states will approve iGaming, but one industry expert believes the sequence of such approvals will not be the same as seen with online sports betting Was.

In a recent conversation with Deutsche Bank analyst Carlo Santarelli, Richard Schutz, who has more than four decades of experience in the gaming industry, said state-level green lights for internet casinos are not coming at the pace seen with sports betting. Will come. Schutz, CEO of American Betters Voice (ABV), cited the potential cannibalization of brick-and-mortar (B&M) casinos as one reason states are not rushing to approve iGaming.

B&M's opposition to iCasinos, which was always present, has increased after both Pennsylvania and Michigan legalized the product, thus giving operators more data from which to form an opinion on the magnitude of B&M cannibalism resulting from the product. Can support/prepare. Santarelli wrote.

Currently, only seven states – Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia – allow internet casinos. This is compared to 38 states and Washington, DC which allow betting on some sports. Missouri joins that group this year, bringing the number to 39.

Don't Bet on Big iGaming Expansion in 2025

In a report earlier this week, Santarelli said iGaming was unlikely to gain state-level approval this year.

Wyoming is also a candidate to legalize iGaming this year, but it's the smallest state in the country, meaning it will do little to move the needle on widespread approval.

Santarelli said the investment community is likely aligned with the view presented by Schutz that land-based casinos are barriers to iGaming and that that form of betting is unlikely to gain widespread approval this year.,

California, Texas Comments

Schutz and Santarelli also discussed the outlook for California and Texas joining the list of states that allow sports betting. Several years ago, AbbVie's chief executive was among the first to say that a 2022 ballot initiative by commercial operators to approve sports betting was unfortunate and he was proven right as that proposal was rejected by voters .

He told Santarelli that it appears operators have learned their lesson and now believe the only path to sports betting in California is not around tribal casino operators.

“Mr. Schuetz's view is that tribes will work through balance of power issues, with the possibility of revenue sharing agreements, while OSB operators work primarily to provide brand equity and technical and operational expertise, Santarelli said.

As for Texas, Schutz told the Deutsche Bank analyst that sports betting could boom this year if it proves profitable for an effort to bring Las Vegas-style casino resorts to the state. There are headwinds for that plan due to the deep pockets of Las Vegas Sands (NYSE: LVS) shareholder Dr. Miriam Adelson, but it remains to be seen if Lt. Governor Dan Patrick (R) changes his mind on gaming expansion – some This seems unlikely at this time.

For sportsbook operators, Texas would be a better choice than California because California would allow a competitive marketplace free of mandatory accommodations for tribal gaming entities.