A Clear Message on Cannibalization, Education Key for iGaming Legalization

Day one of SBC Summit North America.

• More education for elected officials key to iGaming legalization
• Data shows cannibalization has minimal effect on brick-and-mortar casinos
• Very little political risk in support iGaming legislation

More education and a clearer message about how cannibalization really affects brick-and-mortar casinos will go a long way towards making lawmakers comfortable in supporting iGaming legislation, a panel of experts said at SBC Summit North America.

Moderated by Shawn Fluharty, president of the National Council of Legislators from Gaming States (NCLGS), several representatives from FanDuel, Fanatics Betting and Gaming, Bally’s, and Rush Street Interactive shared their thoughts on why iGaming has so clearly lagged behind sports betting legalization.

A lack of educated lawmakers, unfounded fears of cannibalization, and overblown anxiety about political risks have led to the delay in more states seeing approved iGaming bills.

Cannibalization Concerns Are Unfounded

Cannibalization concerns for brick-and-mortar casinos due to legalized iGaming has been a huge hurdle for states where bills have been considered,

Cesar Fernandez, Senior Director, Head of State Government Relations for FanDuel, said states need to cut through the noise when it comes to cannibalization issues regarding iGaming.

Maryland’s iGaming journey became bogged down with studies claiming iGaming would reduce revenue for brick-and-mortar casinos in the state. However, in a state like New Jersey, which legalized iGaming in 2013, the expanded form of gaming has been nothing but a boon for its land-based casinos, Fernandez noted.

Since iGaming’s legalization in the Garden State, Fernandez said brick-and-mortar casino revenue has increase by more than 7.5%.

“Pennsylvania just had its best brick-and-mortar revenue month ever in the state’s history as well,” he said.

Uneducated Lawmakers

Most in the industry take iGaming education for granted, said Elizabeth Suever, vice president of government relations for Bally’s Corporation.

However, most lawmakers are unaware that their constituents can easily find their way to unregulated iGaming sites that offer no consumer safeguards or protections, she said.

Lawmakers constantly ask for additional safeguards such as time and spending limits, self-exclusion lists, and more responsible gaming tools, but they’re unaware that consumers are taking advantage of unregulated markets in their own states.

“If legalized, your constituents will have access to tools they need in a regulated market. Right now, they have none of those,” Suever said.

A lawmaker taking up the iGaming issue is not a risky one, Brandt Iden, vice president of government affair for Fanatics Betting and Gaming, said during the session.

Lawmakers decide to run to fix their schools, fix their roads, they do not decide to run to stump for gaming laws or new gaming ventures, he said.

“This issue doesn’t even make the top-100 reasons of why a lawmaker will run for office…I’ve never heard of a politician either winning or losing an election on this issue,” he said.

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