FEBRUARY 2019 http://www.ggbmagazine.com^39“With a modest licensing fee, a single-digit tax-
rate, and no tax on free-play, companies will be
beating down the door to gain access to the Michi-
gan market. Those operators will have plenty of
wiggle room to advertise and innovate.”
While the Michigan bill will likely be re-intro-
duced into the next legislature featuring a more
sympathetic governor, other states are already in
line. Schneider says Michigan could still be the cat-
alyst.
“There are a number of states that have dab-
bled with legalization for a number of years but
haven’t brought it to fruition,” she says. “California
is a perfect example of this. We’ve been watching
efforts in Michigan for a number of years. Perhaps
the successful launch (online and mobile) of the Michigan Lottery finally
gave a comfort level to state legislators so that they could expand the offer-
ings to other games. And, presumably, the industry must have come to-
gether to support these efforts.”
Ruddock says there are a few possibilities for legalization in 2019.
“The top candidates for online gambling legalization in 2019 are Illi-
nois and West Virginia,” he says. “And there’s always the possibility of New
York’s online poker efforts jumping back into the fray.
“Illinois and West Virginia are both looking for revenue and trying to
figure out ways to bolster their land-based gaming industries.”
Schneider adds Connecticut to that list of states interested in legalizing
iGaming, but adds that successful states legalizing sports betting must in-
clude mobile, which could lead to full iGaming.
“It seems that, given New Jersey’s experience where some 70 percent of
revenues are coming via mobile, state legislators should take heed and move
forward with adding mobile from the outset,” she says. “Mississippi is prob-
ably the only state which has exempted mobile, and I would think that they
may fix that in the near future. And also, looking at the experiences of other
states that have passed iGaming, it’s pretty clear that it has notcannibalized
the clientele coming into the casino. In fact, some of the facts show that
those new online clients may now be attracted to the land-based facilities.”Looking at Lotteries
While there are only a few states that have legalized the sale of online lottery
tickets, there is a definite interest from state lotteries in iGaming. Ruddock
says there’s a good reason for this.
“Online lotteries in states like Pennsylvania and Michigan already offer
pseudo-online slots in the form of instant win games,” he says. In Pennsyl-
vania, state casinos tried to shut down these games without success.
But Ruddock says in states where lotteries and casinos co-exist, there is
bound to be some conflict if lotteries stray into the world of casino games.
“It would create vast regulatory issues,” he says, “the most obvious
being, if both casinos and the state lottery are able to offer traditional online
casino games, would gaming control oversee all of the operators, or would
the lottery be omitted from gaming control’s oversight?
“As such, I would expect state lotteries to leave online casino games tothe casinos and focus on online lottery products and sports betting.”
In fact, in Rhode Island, the state lottery operates sports betting at parlors
located in the state’s two casinos. The lottery also operates mobile sports betting
on systems provided by supplier IGT.
Schneider says there is no “one size fits all” model when it comes to lottery
involvement in iGaming.
“The lottery involvement in iGaming will vary greatly state by state,” she
says. “In some states, they may operate, in some regulate. We’ll probably see a
lot of permutations. But, given the pressure to produce more revenues that
most state lottery directors are under, we’ll see more states exploring this... es-
pecially those that may not have much in the way of a commercial or tribal
casino infrastructure.”GoinG Green
New Jersey is the largest state with an active iGaming industry and
stands today as the “gold standard” not only in regulations but also in
increasing popularity of the business. Revenues have increased steadily
over the last 36 months. In 2018—through November—iGaming
revenues have soared almost 20 percent with more to come.NEW JERSEY iGAMING REVENUES 2018 *
CASINO 2018 2017 % Change
Borgata $49,042,288 $44,231,806 10.9%
Caesars Interactive NJ 41,118,560 39,200,857 4.9%
Golden Nugget 94,612,026 62,481,964 51.4%
Hard Rock 3,797,242 n/a
Ocean Resort 2,286,693 n/a
Resorts Digital 40,954,075 39,746,488 3.0%
Tropicana 37,881,755 39,187,222 (3.3%)
Total Casino Industry $269,692,639 $224,848,337 19.9%
*Through NovemberSource: Fantini’s 2019 National Legislative PreviewStatus of Sports Betting Legalization in the U.S. 2019
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