Illinois has yet to introduce online casino gambling. When it finally arrives, there is concern that it may negatively impact the retail casino market.
It is a reasonable question to inquire about.
At first glance, it may seem that with the availability of Illinois online casinos, individuals will no longer have the desire to participate in traditional, in-person casino games.
Why would gamblers bother going to physical casinos when they can conveniently play casino games from home once online gaming is available in Illinois?
There is substantial evidence supporting the coexistence of online casinos and retail casinos in the Illinois market.
Illinois online casinos would complement, not cannibalize retail
A recent US gaming study funded by MGM Resorts and conducted by GP Consulting earlier this year focused on the effects of online casino gaming on traditional brick and mortar casinos.
Dr. Kahlil Philander, the primary author of the study, discovered that each type of casino appeals to distinct demographics. In response to his findings, Philander commented:
Regular casino goers often develop a sense of community within those environments on a sociological level. Therefore, it is not immediately clear that the online gambling experience can fully or partially substitute for the sense of community found in traditional casinos.
In the markets we analyzed, the legalization of online gaming did not appear to have any significant effect on retail gaming.
President and Chief Operating Officer of theScore Bet sportsbook, Benjie Levy, stated that online gambling has enhanced the retail casinos under his supervision. theScore Bet is currently operating in Colorado, Indiana, New Jersey, Iowa, and Ontario.
Levy stated in a Toronto Star article that the competition between online casinos and retail casinos in the four U.S. states where theScore operates is fierce.
“We are witnessing overall market growth without any job losses.”
Online poker helped grow the popularity of the in-person game
During the online poker boom from 2004 to 2011, the number of retail poker rooms in casinos saw a significant increase according to statistics.
Additionally, the in-person World Series of Poker Main Event saw a significant increase of over 8,000 entrants following the rise of online poker. This demonstrates that online poker did not detract from traditional poker, but rather played a vital role in expanding the live game and attracting more players to casinos.
What they have found in Michigan
In December 2019, Michigan legalized online casinos and sportsbooks. Nearly three years later, officials have observed overall growth in gambling. While online casinos and sports betting operators have not significantly harmed the state’s retail casinos, the situation is somewhat complex.
According to PlayMichigan, Andrew Winchell, FanDuel’s director of governmental affairs, stated that…
I believe states recognize that online casinos can benefit both land-based properties and increase state tax revenue without harming the retail market. This growth can also extend to the sports betting market, creating a synergy that allows customers to easily transition between the two platforms.
Comparing retail and online gambling numbers in Michigan can be challenging due to the emergence of online gambling at the onset of the COVID-19 pandemic, which greatly affected in-person gambling. Despite this, a comparison by PlayMichigan of Detroit’s three casinos’ revenue in 2019 and projections for 2022 revealed the following:
- MGM Grand Detroit is projected to end 2022 at a similar level to its performance in 2019.
- MotorCity Casino is projected to experience an approximately 18% decrease in retail revenue in 2022 compared to 2019.
- Hollywood Casino at Greektown is expected to see a 20% decrease from its 2019 revenue. However, Greektown has been experiencing a decline in revenue since its peak in 2011, which predates the rise of online gambling.
Retail casinos often warn of cannibalization without evidence
In April, Ontario made history by becoming the first Canadian province to introduce online casinos and sportsbooks. Before the market officially opened, Great Canadian Entertainment issued a report expressing concerns about the potential negative impacts of online gambling and urged the government to postpone the launch.
GCE has 14 physical casinos in Ontario and believed that online gaming would result in significant job cuts in retail and decreased revenue. However, the company’s report did not provide concrete evidence that online casinos directly impact profits from brick-and-mortar establishments.
After almost six months since the online launch in Ontario, there have been no signs of widespread job cuts at the province’s casinos.
An industry insider who spoke to PlayCanada on the condition of anonymity stated that iGaming does not cannibalize the land-based market. They pointed to market data that clearly shows the opposite.
The entire proposal from GCE was an effort to delay entry into a new market for which they were unprepared.
In-person casinos offer an atmosphere unmatched by online casinos
In addition to the unparalleled convenience of betting on the go with online casinos, in-person casinos provide a unique and enjoyable atmosphere for gamblers. Many players see a trip to the casino as a fun opportunity to socialize with friends, something that is not possible with online gaming.
Retail casinos also provide regular customers with various benefits. These may include offers such as:
- Complimentary evenings at the casino resort.
- Tickets to live entertainment
- Complimentary tickets for dining at buffets.
Online betting on University of Illinois or Northwestern football teams is not permitted. You can only place bets on Illinois colleges at physical retail casinos.
In 2025, Illinois online casinos will not compete with traditional brick-and-mortar casinos. In fact, both forms of gambling can thrive together.
