Pandemic May Lead States To Follow NJ’s Path By Adding Mobile Gaming

Panelists in a casino industry discussion point to New Jersey as the example other states should follow when it comes to online gambling.
New Jersey has led the way in the U.S. with online casino gaming since 2013 and mobile sports betting since 2018.
On Tuesday, an executive with a major presence in the state told an ICE North America gaming industry livestream audience that the COVID-19 pandemic might accelerate the desire of other states to follow suit.
“Clearly this is a difficult time for people around the globe,” said Seth Young, the chief innovation officer at PointsBet. “But if I have to search for a silver lining on the advocacy side, the argument for the convenience of mobile gaming is entirely strengthened in the U.S.
“We already know that the data shows that mobile does not cannibalize land-based gaming. So with nearly all casinos closed in this country at this point, I think there’s a general recognition that an online gaming profile in each state could help mitigate the impact of casino closures, while still providing a safe and entertaining product for consumers.”
The point will be underscored on Wednesday, when the New Jersey Division of Gaming Enforcement reveals its casino revenue figures for April.
The loss of all major sporting events will cut significantly into the sports betting tally, but online casino gaming will see another significant boost after a strong March — especially with online poker.
New York, which has no legal online gambling and which previously only offered sports betting at now-shuttered casinos in the Catskills and to the north, will not take in any gaming tax revenue in April.

Why legislatures will lean into gambling expansion

“I think perhaps opponents of online gaming have become proponents of it, given the circumstances,” Young added.
Young said he expects “a busy back half of the year, and a busy 2021, in state legislatures as states that desperately need tax revenue to fund public policy initiatives consider how online gaming and sports betting help.”
Kresimir Spajic, managing director for online gaming and sports betting for Hard Rock International, said that even the largest states that have lagged in legal gaming options — California, Texas, Florida, and New York — may have to reconsider their gambling decisions in this new world.
“What could change is these austerity measures,” due to loss of other revenue, Spajic said. “Will this be an opportunity to introduce mobile [sports betting], maybe even online casino, is still to be seen. While some people will claim that government has higher priorities than this, at the same time gaming is something that can bring in immediate tax revenues and help states balance the losses they have had so far. Hopefully one or two of these big states can make it happen in the next year or two.”
Bill Anderson, an executive with BetGenius, said that “one positive” that he has seen in recent weeks is a willingness of state gaming regulators to approve wagering on formerly obscure sports, with Russian table tennis and Belarusian soccer among those that have captured the fancy of New Jersey bettors.
New Jersey is currently the only U.S. state to have rolled out “fixed odds” betting on horse racing, but Young said that option also could become more appealing in light of the current economic environment.

Hard Rock retooling during pandemic

Spajic, whose Hard Rock brand has operated a casino in Atlantic City since 2018, said his company has tried to make the most of this bad situation. Just six weeks before that casino opened, the U.S. Supreme Court repealed the Professional and Amateur Sports Protection Act of 1992, paving the way for any state to legalize sports betting.
“Since PASPA was repealed, we have all been running in a race,” Spajic said. “There was not time to revisit what we were doing, how we focus on our product, on our operations. These couple of months have been a good reflection point, to slow down and figure out if there are any weaknesses and where we can have our improvements.”
Anderson agreed, calling the current lull “a gift of time” for operators.
Young said that the repeal of PASPA was a “tipping point” for the expansion of legal gambling in the U.S. and that the current pandemic will be another.
Spajic added that a key focus is on the concept of a “single wallet,” allowing a sports bettor or an online casino games player to seamlessly shift from one entertainment option to another.
New Jersey’s monthly revenue figures showing that more than 80% of legal sports betting is occurring online also should lead other states to take heed, Young said.
“If you ignore reality, it doesn’t make that demand go away — people will just engage in the black market instead,” he said. “We continue to learn that prohibition doesn’t work in the U.S. Imagine that.”
As far as long-term winners in the evolving sports betting and online casino markets, Spajic noted that “size matters. The known brands, with pre-existing databases and deep pockets, can wait a few years. Everyone will be tested. Who is willing to lose money for a few years, and invest tens and hundreds of millions of dollars, to ultimately derive a huge benefit off a $8 billion market projected for 2023 or 2025, depending on which analyst you are looking at.
“Long term, the competition is going to increase, and the price of customer acquisition will continue to grow, with fewer players in the market that will be able to compete,” Spajic said. “Others will, slowly but surely, drop out.”
Photo provided by shutterstock

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