Operator-commissioned study claims iGaming helps brick and mortar casinos

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A new study commissioned by the Sports Betting Alliance is the latest piece of research to weigh in on the online casino cannibalization debate.

In a 167-page missive from Analysis Group, the research firm looked at the group of iGaming states as well as a handful of states considering iGaming to both determine the impact of online casinos on states that have them and project the potential impact of online casinos on these other states.

SBA study suggests iGaming boosts retail casino revenue 2%

Using existing operator data, projections on both land-based and online casino performance and survey data of casino customers in the states involved, the study concluded that, on average, iGaming expansion has led to a 1.9% increase in retail casino revenues.

That number is comparable to the 2.44% growth rate put forth by an iDEA-commissioned study from Eilers & Krejcik. It also differs significantly from a study from The Innovation Group commissioned by the state of Maryland that suggests the impact of online casinos on Maryland retail properties could be as high as 10%.

The Sports Betting Alliance is a trade group consisting of FanDuel, DraftKings, BetMGM and Fanatics. All four operators are in favor of online casino expansion into new markets.

Survey data suggests customers would still visit casinos even with iGaming

While surveying more than 2,300 people from potential iGaming states New York, Virginia, Illinois, Maryland and Virginia, the study determined that most people would either be more inclined or indifferent to visit a land-based casino if online casinos were an option in the state.

The amount of players who would be less inclined to gamble at a land-based casino ranged from 22.7% in Maryland to as low as 13.4% in New York. On the other hand, the percentage of people who would be more inclined to go to a casino if online casinos were a possibility ranged from 23.3% in Illinois to 31.7% in New York.

Rash of studies drawing different cannibalization conclusions

This legislative season has brought an onslaught of studies on the topic of casino cannibalization and each draw very different set of conclusions.

Studies backed by online operators and those sympathetic to online operators tend to conclude there is a small bump to brick and mortar casino revenue in addition to the huge financial benefit that comes with a new tax revenue source.

Meanwhile, studies commissioned by groups sympathetic to online casino opponents tend to not only predict casino cannibalization but also potential job loss.

Each study has embraced a different methodology to try and answer the relatively tricky question of how casinos in these iGaming states would have performed had the new vertical not been legalized. In a state like Michigan, it is particularly difficult to assess the impact of online casinos on the state because the three commercial casinos in Detroit report land-based revenues but there are no exact figures for the revenue of the 26 tribal casinos in the state.

The SBRA takes a look at other studies that have attempted to tackle the question. It generally complimented the studies that drew similar conclusions to its own and criticized the methodologies of those that concluded cannibalization was a possibility.