Could Online Casinos In New York Threaten Bottom Line Of Land-Based Casinos?

Written By Matt Boecker on January 11, 2023

When online casinos come to New York, it’s unlikely that in-person gaming facilities will lose business once bettors can play from the comfort of their homes.

While NY online casinos aren’t available in the Empire State yet, there will certainly be a push for it to be legalized in 2023.

Sen. Joe Addabbo has said the authorization of online casinos is on the top of his to-do list for the 2023-24 state budget. That said, Assemb. Gary Pretlow believes the real push to bring iGaming to New York will come next year after bills regarding the matter didn’t gain much traction in 2022.

Regardless of when, any effort to legalize iGaming in New York will face some pushback. Including from those who believe NY online casinos will cannibalize the land-based casinos throughout the state. It’s a common misconception. The thought is, why would someone travel to an in-person casino if they have access to the same table games and slot machines online?

In reality, there’s evidence that suggests iGaming will actually be complementary to retail casinos. And here’s why:

Study shows online, retail casinos can exist in same market

MGM Resorts funded a major US gaming study earlier this year on the topic of online casino’s impact on brick and mortar locations. Dr. Kahlil Philander served as the lead author of the study, conducted by GP Consulting.

Philander’s findings proved that iGaming won’t stop people from betting in-person just because an online alternative exists.

“From a sociological level,” Philander said, “people who are regular casino goers often find some sort of sense of community within those environments.”

“It just didn’t seem like there was any material impact from online gaming legalization on retail gaming, in all the markets that we studied.”

In a conversation with PlayNY, Sen. Addabbo said casinos are finally getting back to pre-COVID levels of revenue. Addabbo remains confident that iGaming would only make the New York gaming industry more profitable.

“Online gaming, as we’ve seen in (New) Jersey, it coexists,” Addabbo said. “My point of view is there should be no cannibalization at all when we talk about iGaming in New York. So therefore, those that have a license will be apt to get a license to iGaming. Now the conversation will not only include the seven licensed casinos in New York State, but also the racinos and VLT operators and whether they are to partake, the Native Americans to opt in.”

Retail NY casinos still serve a purpose

Sure, in-person casinos won’t be able to compete with the convenience of betting on the go. But there are perks of going to a casino that iGaming can’t match.

Bettors view a trip to the casino as more than just gambling. It can be a way to socialize with friends or family over drinks and a meal.
Casinos have also been known to offer perks to its frequent guests, such as:

  • Casino hotel vouchers
  • Free tickets to live entertainment
  • Free tickets to buffets

Brick-and-mortar casinos and iGaming both serve their own purposes — and can survive within the same market.

In fact, the state constitution calls for iGaming operators to pay brick-and-mortar casinos to house their servers. So retail casinos will be getting a slice of the revenue from its digital counterpart.

Race for a New York casino license

April’s state budget allows for three more casino licenses to be handed out in New York. But Resorts World NYC and Empire City Casino are expected to receive two of them, leaving only one truly up for grabs. The Gaming Facility Location Board issued a request for applications to kick off the process.

While there will be proposals for a casino in Manhattan, casino owner and real estate mogul Jeff Gural told PlayNY he’d bet against them being accepted.

Gural believes the city has nothing to gain from a casino coming to Times Square, as there’s already plenty of tourist attractions in the Big Apple.

“The people living there have no interest in it. And the politicians, nobody wants it to be too easy to go lose your money in a casino. So I’d be shocked to see a casino (in Manhattan).”

Photo by PlayNY
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Matt Boecker

Born in Oak Lawn, Illinois, Matt graduated from Northern Illinois University, where he covered NIU hockey for the Northern Star. Since then, Matt has specialized in NFL and NBA coverage for various websites and podcasts before shifting gears to casino and sports betting coverage.

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