New Indiana online casino report projects $469M in Year 1 revenue if legalized

Indiana online casino projections
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The legislative push for online casino technically won’t get underway until the start of 2023, but the political wheels are already turning in some states.

Indiana is said to be one of the states most interested in legalizing online casinos. The Indiana Gaming Commission (IGC) took the step of commissioning a report from Spectrum running down not just how much money the state could make off the venture but also the best ways to approach licensing, responsible gambling, and taxation.

Projected revenues total almost $2B over first three years

The 100-page report covers all facets of online gambling and a thorough overview of how online casino expansion has gone in other states, namely Michigan, New Jersey, and Pennsylvania. After assessing these markets based on three different factors and averaging the three, the report estimates the state would generate the following revenue over the first three years of operation:

  • Year 1: $469 million
  • Year 2: $663 million
  • Year 3: $830 million
  • Total: $1.96 billion

These numbers considered each Indiana online casino would offer the full range of games, including live dealer. The report also forecasted tax revenue based on rates of 20%, 30%, and 45%, with the results ranging from around $340 million to $940 million for the first three years of operation. The projections also generally align with a similar report from iDEA, released earlier this year.

The report also went through options for how the state could go about licensing online casino expansion. Citing experts within the industry, Spectrum advocated for a model where licensing is tethered to land-based casinos in the state, but allowed for additional skins the casinos could dole out to partners and other brands.

Retail casino business would grow with online expansion

A good chunk of the report also focused on the notion that this expansion could hurt existing live casinos. Using primarily post-pandemic numbers, the report indicates that cannibalization is not a concern. Input from operators echoed the desire to offer a full omnichannel experience, where retail and online work together to strengthen brands.

“In jurisdictions where operators can offer both digital sports betting and igaming, player spending for those who participate in both activities is significantly higher than those who participate in just one type of digital play,” the report stated.

The report did caution that an online casino bill would do very little in the way of new jobs and economic opportunities for Indiana, with one exception. If the legislation included live dealer games, the expansion of studios from companies like Evolution could bring several hundred new jobs into the state. Without live dealer, the jobs would number maybe a couple of dozen.

Online casino is a younger demographic for operators

Looking at consumer data cited in the report, online casino would also bring a newer, younger audience to these gambling businesses. Using metrics from an unnamed operator, Spectrum created the following breakdown of online casino customers:

Average land-based casino customers are in the 55+ range, while nearly half of all online players are between 21-39 years old. Additionally, unlike online sports betting, which can range from 5-15% female, the audience for online casinos includes a much larger female population. When it comes to what online casino is actually competing with if not land-based casinos, here is the explanation the report offered:

“Although there are no supporting data, experts in digital gaming believe that iGaming competes for time and dollars with other leisure forms of digital entertainment, such as streaming movies and social games such as Candy Crush.”

State Sen. Jon Ford has spoken about his intent to file an online casino bill in the next legislative session. Armed with a report like this touting the economic benefits, Ford might be able to drum up the support to get it passed.