Jeff Ifrah, a founding member of iDEA Growth, was among a number or industry experts to testify before the Council of the District of Columbia’s Committee on Finance and Revenue in its recent Public Hearing on Bill 22-944, the Sports Wagering Lottery Amendment Act of 2018.
In his address, he explained the economic benefits that other states have derived from the legalization of sports betting and online gaming, and the successful regulatory and technological safeguards that other states have put into place to activities and safeguard consumers.
He stated: “From our peer–reviewed research on the effects of online gaming in jurisdictions that have permitted or expanded it, here are some of our findings. Legalized online gaming and sports betting offer significant economic benefits to states in the form of tax revenue and improved employment opportunities. Legalized sports betting and online gaming channel those funds towards tax revenue, business opportunities and technological innovation instead of offshore and illegal outlets.
“Economic benefits have been demonstrated in states like New Jersey, where online gaming has been legal since 2013. From 2013 through 2016 New Jersey iGaming directly and indirectly generated close to $1bn in revenue, over 370 full time jobs, over $200m in employee wages and over $124m in tax revenue to state and local governments.”
Ifrah told the hearing that the introduction of sports betting and online gaming has been complementary to casino gaming, producing incremental revenue and not cannibalizing land-based revenue streams.
He said: “Legalized online gaming and sports betting work best when a strict regulatory framework protects consumers. People are betting anyway – usually with illegal offshore entities. Through legalization and regulation we protect the consumer and the game, and keep the money in the state. In fact, iDEA has been instrumental in assisting states like New Jersey and Pennsylvania create their own proper regulatory frameworks, and we are currently advising other jurisdictions including Ohio, Illinois and New York.”
Ifrah also backed the use of “Know your Customer” (KYC) procedures to track account funding and gaming transactions. “They have been found to discourage money laundering more effectively than land-based methods and to prevent underage gambling better than land based casinos by requiring online ID and social security verification,” he advised.
“Technology effectively enforces rational regulation,” he added. “For example, in 2014 the director of New Jersey’s gaming enforcement body reported that geolocation was performing at a 98% success rate, ensuring that betting stayed properly within the state’s borders.”
Ifrah’s final piece of advice to the DC Committee was to be more inclusive in the choice of gaming on offer. “The most effective state legislation will provide for the triumvirate; sports, poker and casino games,” he noted. “To maximize sports betting revenue, don’t limit the options to just sports betting: expand into other areas, like online slots and poker. Mobile gaming increases a casino’s audience base, bringing new customers to the table and providing a new revenue stream from younger, more tech savvy gamers who expect to place bets from their phones.”