Study Shows NY Online Casinos Could Actually Help Retail Properties

Written By David Danzis on February 29, 2024
Image of man on his phone while playing a slot machine for a story on a study that showed little cannibalization of retail casinos after a state legalized online casinos

A recent study exploring the economic effect online casinos have on their land-based counterparts may be a critical piece of evidence in New York’s legislative tussle over legalized internet gambling.

Eilers & Krejcik Gaming, a consulting and analytics firm, determined that online casinos have a positive impact on retail casinos’ gross gaming revenue. The report was commissioned by iDEA Growth, a gaming industry consortium of which PlayNY’s parent company, Catena Media, is a member.

Lawmakers in Albany are considering legalizing online casinos in New York. The success of online sports betting in NY and the impending addition of three downstate NY casinos has politicians seeing green as gambling taxes continue to rise.

State Sen. Joseph Addabbo, D-Queens, has introduced legislation to permit New Yorkers to legally play slots and table games online. Addabbo believes iGaming could generate nearly a billion dollars in additional tax revenue for New York, money that could be used to address the state’s massive budget shortfalls.

EKG report: iGaming in other states actually boosted land-based revenue

The EKG report compared the growth rate of land-based casino revenue before and after the introduction of online casinos in the six states that currently operate both land-based and online gaming. According to the study’s findings, land-based casinos saw average quarterly revenue increases of 2.44% following the introduction of legal online casinos.

Furthermore, EKG predicts the “typical state” would boost casino revenue by 1.7% annually after introducing iGaming.

States that currently offer legal online casinos and land-based casinos include New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut and Delaware. Rhode Island will launch iGaming later this year.

Online casino revenue in NJ, PA and MI exceeded $1.5 billion in each state in 2023.

Study addresses another report indicating cannibalization of land-based casinos

The EKG study also examined two other recent reports that came to counter conclusions. One was a research note from Deutsche Bank. The other was a report prepared by The Innovation Group for the Maryland lottery. Both concluded that online casinos would negatively impact brick-and-mortar gaming operations.

Specifically, EKG says The Innovation Group’s study used “flawed methodology,” including counting children in Maryland’s total population, which skewed the results.

Following the release of EKG’s findings, a partner with The Innovation Group said that while there was validity in the criticisms, the changes would still yield the same results, which is that online casinos represent an overall additive but comes with some land-based cannibalization.

Most unbiased industry watchers and experts point to NJ — which is the most mature online/retail state — as evidence of marginal cannibalization. Land-based gaming revenue from Atlantic City casinos has been trending downward for most of the market for several years (particularly post-COVID) while iGaming revenue is surging. PlayNJ, a sister site of PlayNY, predicts monthly online casino revenue in NJ will match or exceed in-person revenue generated by AC casinos in late 2024.

We’ll see if this study has any effect on New York’s bill

These findings from EKG come as Addabbo continues to champion a bill to legalize online casinos in New York this year.

The biggest hurdle, however, surrounds the New York Hotel and Gaming Trades Council, which represents over 5,000 gaming workers throughout the state. And even more once the three downstate casinos open.

Recently, Bhav Tibrewal, political director for HTC, called the legalization of NY online casinos a “job killer.” That was followed soon after by more than 700 employees at Resorts World NYC signing a letter addressed to Addabbo.

In it, they expressed how “appalling” it was that the senator supported 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.”

Photo by PlayNY
David Danzis Avatar
Written by
David Danzis

David Danzis is a writer for PlayNY. A New Jersey native and honors graduate of Rutgers University, he served as a newspaper reporter for the New Jersey Herald and Press of Atlantic City, earning statewide awards for his coverage of politics, government, education, sports and business. Today, he contributes to New York's growing legal gambling landscape, including online sports betting and potential legalization of NY online casinos. David lives in Mays Landing with his wife and two children. When not on the beach, a golf course, or snowboarding, David enjoys watching his beloved New York sports teams — Yankees, Jets, Rangers and Knicks.

View all posts by David Danzis
Privacy Policy