Two Casino Execs Offer Differing Views On iGaming’s Impact, NY Pols Should Take Heed

Written By David Danzis on April 24, 2024
Image of casinos executives Rob Norton and Mark Giannantonio in front of New York City skyline for a story on their comments on iGaming expansion in New York

Besides all of the other pressing matters requiring their attention, New York lawmakers are weighing the merits of legalizing online gambling in NY.

Record-setting returns from the first two years of mobile sports betting in New York jump-started real conversations in Albany about the potential billions of dollars in additional tax revenue from the objectively more lucrative online casino market.

Whenever the topic of legalizing internet gambling is brought up, an inevitable question soon follows: Do online casinos hurt brick-and-mortar casinos?

Fair to ask: Would NY online gambling expansion hurt land-based casinos?

In New York, that question is particularly timely.

State gaming regulators are in the process of awarding three commercial casino licenses to applicants in the downstate area, which includes New York City, Long Island and surrounding counties. The amount of money being proposed to construct new casinos and the amount of revenue projected from their operations are astronomical.

It is a fair question to ask whether NY online casinos could negatively impact the success of both existing and incoming land-based gambling operators.

However, getting a straight answer is next to impossible. Anyone in a position to respond and worth listening to is typically speaking from an objectively conflicted perspective. Executives, regulators, politicians, analysts and segments of the media all have a direct or indirect interest in highlighting iGaming’s benefits and downplaying its drawbacks.

Which is why a brief panel discussion at a recent gaming conference in Atlantic City involving two retail casino executives with similar business objectives and goals was so rare. Mark Giannantonio, president and CEO of Resorts Casino Hotel in AC, and Rob Norton, president of Baltimore-based Cordish Gaming Group, had two very different responses to whether online gambling has a negative effect on land-based casinos.

Land-based casino exec says online is ‘cannibalistic’

Giannantonio’s property in AC has a partnership with Resorts Digital Gaming, which operates the successful Resorts Online Casino brand. Resorts AC is also affiliated with DraftKings Sportsbook for both retail and online sports betting.

“We get a lot of people who bet sports online who come into our physical location to place a bet,” Giannantonio said during the 27th annual East Coast Gaming Congress at Hard Rock Hotel & Casino Atlantic City.

Norton, whose late father Steve Norton was a high-level executive at Resorts in the late 1970s, said his company’s retail casinos, including the Live! properties in Pennsylvania and Maryland, have a less optimistic view.

“We definitely see it as cannibalistic,” Norton said. “I do think we’re hurting ourselves.”

This conversation sounds familiar

Historically, the discussion of whether online casinos have a negative impact on land-based casinos revolves around cannibalization. That is the idea that one product (online) will reduce the market share of a similar but different product (retail), ultimately leading to the latter’s near, if not complete, elimination.

In other words, will gamblers stop going to their favorite casinos if they can simply play table games or slots on a digital device?

The question is more relevant today than ever as several states across the country are looking to places like Michigan, Pennsylvania and New Jersey, which all have land-based and internet casinos, as possible models for their own expansions of legal gambling.

Looking at land-based returns vs. iGaming in NJ, PA and MI

The evidence from Michigan and Pennsylvania says iGaming is an overall net positive for land-based casinos. Both markets are relatively young, but retail revenue has essentially mirrored the growth of online casino revenue in those two states.

The conclusions are less definitive in NJ, which is a much more mature market for both in-person and digital gambling. Brick-and-mortar gambling revenue is essentially stagnant in the post-COVID era for all but a few operators.

Meanwhile, the pandemic pushed gamblers toward digital options. Presently, NJ online casinos are consistently setting new monthly revenue records and are on pace to surpass AC’s nine properties by the end of 2024.

Giannantonio said online casinos have been a net positive, with a bit of a caveat.

“For New Jersey, it has been additive,” he said at the gaming conference in AC, noting that NJ is collecting more in taxes from online gambling since it is taxed at a higher rate (15%) than land-based revenue (8.5%).

Norton presented an alternative take. He suggested that the current playbook in the gaming industry does not take full advantage of converting digital customers to land-based players and vice versa.

“The approach we’re taking right now is pitting ourselves against ourselves,” he said.

NY casinos already doing quite well

The regional significance of downstate New York casinos was a big topic at ECGC. The focus makes sense considering most industry experts, including some AC casino executives, expect Big Apple casinos to be major players in the legal gambling game.

Stacey Rowland, chairperson of the New York Gaming Association, said the uncertainty around online gambling’s impact on retail casinos is a primary reason why internet operators should be required to be tethered to a land-based casino in the state.

But, as competition intensifies among nearly a dozen bidders for three available NY casino licenses, so, too, does the discussion around expanding legal gaming in the Empire State to include online casinos and internet lottery, with some studies showing that iGaming would actually help land-based properties.

And while the prospect of legalizing online casinos in NY is all but dead for this year, 2025 or 2026 are very much in play. Other states, such as Maryland, are also considering iGaming legislation.

Coincidentally, New York and Maryland are home to the United State’s two highest-grossing commercial casino properties (and four of the top six) outside Nevada or Mississippi (neither state reports individual operator gaming revenue).

Resorts World NYC in Queens and MGM National Harbor outside Washington, DC, have flip-flopped the top spots the last two years, with the racino at Aqueduct moving ahead in 2023, according to the American Gaming Association.

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