To some in the industry, Rob Norton is an obstructionist. The president of Cordish Gaming’s stance against iGaming legislation in states like Maryland has some in the business, like BetMGM CEO Adam Greenblatt, taking swipes at him.
During a fireside chat with SBC’s VP of Growth and Strategy for the Americas Sue Schneider, Norton elaborated on his gaming stance, including how it has changed over the years.
At one point Norton was in favor of igaming
“I was very pro igaming at one point in my career, and not so long ago honestly. But as as time has gone on and we’ve started to see the results of states that have brought on casino, and even as mobile sports betting is expanded, my opinion and my view of things started to shift slightly to the point where I think that we have to have a real honest conversation about what’s happening today,” he explained.
While many in the industry point to a one of a glut of studies about the potential impact of gaming expansion on land-based gaming, Norton stands by his point of view and standards precisely because he ran the numbers on his own.
“I know there are a ton of studies out there and everybody leans on a different study that supports their narrative. Well, I didn’t do it that way. I did the studying myself with my own team without an objective, without an agenda.”
Norton says online casinos cannibalize 15-23% of land-based business
At the end of the day, Norton said he determined the online casino cannibalization rate is between 15-23%. That number is two to three times higher than the most pessimistic study. In that research, The Innovation Group determined a rate of 8%.
What Norton included that these other studies did not was other revenue streams for brick and mortars, such as food and beverage. While most research focused purely on GGR, Norton’s experience growing up in the casino industry resulted in him viewing the issue more holistically.
“You can say my numbers are wrong,” he said. “The fact as I did that myself so you’re not going to change my opinion on it because I’m not referring to someone else’s study. I’m doing my own.”
Norton pointed to Pennsylvania, which added five casinos since 2018, bringing the total number of properties in the state to 16. He noted that, despite this massive increase, revenue was only up 1%. He suggested gaming could be a large reason why.
Retail sports betting helped table games’ bottom line
When it comes to retail vs. online sports betting, Norton also had a more nuanced take than most online opponents. Some critics claim alarmist stats that 90% of retail betting is destroyed when online betting is offered, simply parroting the split between the two verticals in a state. Others use lower numbers but still focus on online betting detracting from the retail betting experience.
For Norton, Maryland is a great example of how retail betting became additive in other ways. Retail launched around a year before online sportsbooks rolled out in the state and Cordish had a good indication of how its retail betting offering impacted other parts of the casino.
“Sports betting revenue dropped by over 65% in the first couple months and it stayed there and has not recovered. When you look at table games, for the first time in the history of table games in the state of Maryland that we have seen a year-over-year decline on a yearly basis. Slot revenue went from a growth rate that had been pacing on average about 5% to less than 1%. And people will tell you you don’t really have a lot of crossover between sports and slots, but it’s still had an impact,” he recalled.
Norton says there are opportunities for online sportsbook/casino cross-sell
In fact, Norton thinks the opportunities for synergy across online and retail exist in the sports betting realm.
“I would like to still think that we can figure out how to create an environment where there is an experiential aspect in that we’re taking the fantastic sports betting operators out there, which we are not one of them, and leveraging on-site in-store retail experiences that can create opportunities for people to become brand loyal,” he argued. “I know that those in the industry will say the experience on the app is what drives loyalty. I think loyalty is driven from emotion, not from an app. So I think we have to figure out how to connect people’s emotions. To me, that’ll be where you get the next growth.”
For Norton though, the overlap between online and land-based gaming can be more of a nuisance than an opportunity. He argued at length that there is a correlated spike in problem gambling when new states have rolled out online gaming. He also thinks the online industry’s response has a negative impact on more than just itself.
“Unfortunately, this is an area where we can’t separate the land-based facilities from the digital operations because we’re all painted with the same brush as it relates to responsible gaming. So I think we continue to make the story worse on our responsible gaming with our action or lack of action in the digital space right now. You know, the unfortunate part is it is starting to tar the whole industry.”
igaming industry needs to think more about community
At the end of the day, Norton is not the obstructionist some make him out to be. He is open to having conversations, he just wants them to be more open.
“We can’t keep ignoring the states with igaming and mobile sports betting and the problems they are seeing around problem gaming. We can’t keep ignoring responsibility about how we’re promoting ourselves out there. So I think the first step is starting to happen, but we have some pain to go through to get there. And I think until we really get the answer to this, I think igaming is not an inevitable outcome right now.”
Finally, Norton encouraged the online gaming industry to improve their approach to communities. As unions and local groups join the growing number of igaming opponents, being able to provide answers about what these industries can do to benefit these communities is increasingly important and often something land-based casino operators understand more than their online counterparts.