As lawmakers and stakeholders get ready to congregate in Louisville, Kentucky for the summer meeting of the National Council of Legislators from Gaming States (NCLGS), the industry is reflecting on how lobbying efforts are going.
With a tough year with some small wins like sweepstakes bans but some big losses like tax hikes across several states, it might be time to reconsider the lobbying approach.
Jonathan Michaels, the founder and principal of the consulting firm Michaels Strategies, has some suggestions on how to tweak gaming lobbying, particularly when it comes to online casino expansion. As an experienced gaming veteran with stints at American Gaming Association and Sightline, Michaels has witnessed the dry spell of expansion the past few years and thinks now is the time to reevaluate the message.
Unless something drastic occurs in Ohio or Maine gets signed into law, 2025 will mark the sixth-straight year the gaming industry has been shut out of any multi-operator online casino opportunities.
While sports betting legalization has been incredibly successful with 39 jurisdictions legalizing, online casino remains stubbornly behind. For years, there was constant discussion at industry conferences regarding online casino’s “inevitability” but recent history would suggest that notion is incorrect. This although online casino generated $8.4 billion in revenues in 2024 with only three states – Michigan, New Jersey and Pennsylvania –generating the overwhelming majority of that total. Those three states alone generated nearly $2 billion in state tax revenues last year.
Current online casino lobbying playbook isn’t working
Part of the reason for this lack of success is that legalization proponents keep trying to use the same playbook it used to help expand sports betting, which focuses largely on tax revenues generated and the presence of illegal operators in the market. This lobbying focused approach has not been successful to date and has even resulted in negative unintended consequences like the recent tax increase in Illinois.
What about a public affairs approach?
A new approach is needed and one that has proven effective in countless other areas is shifting to a more public affairs approach.
Think of a public affairs approach as a pre-lobbying strategy. Having worked for a dozen years in trade associations and leading government affairs efforts for several organizations the last few years, I’ve seen how this approach has been successful and could be again for online casino proponents. This approach could lay the groundwork and address the key concerns that opponents of expansion have.
A three-pronged online casino approach
To me, there are three key areas that need to be addressed in order to develop an effective public affairs approach to online casino legalization:
#1: Consumer protection
Concerns around problem gambling remain the single biggest hurdle to any online casino expansion. There are lots of questions around how online gaming, both casino and sports betting, impacts responsible gaming and gambling related harm. When land-based gaming was legalized in new markets, many of the same concerns were raised, but research showed that new casino openings had no discernible impact on gambling addiction in those markets.
Proving that online expansion has displayed similar results is necessary. But with a relative lack of research and concerns around use of help line call increases and internet searches being used to justify public health concerns, the industry needs to better understand the impacts.
Further, the industry needs to do more to develop tools and solutions to enhance responsible play on their platforms. The tools that have been mandated around limits go largely unused by players, and until the industry develops real solutions to ensure players have the tools at their disposal for responsible play, this will continue to be the albatross brought up in any expansion discussions.
#2: Consumer demand
It would appear to be pretty clear that consumers want these types of products. The incredible growth and success of online casinos in Michigan, New Jersey and Pennsylvania as well as the rise in grey market gaming, including sweepstakes casinos, both indicate players want more digital options. But I cannot recall a single poll that has been conducted in any new state regarding public opinion of legalization. Investing more in polling and understanding the mood of the state’s electorate will have profound consequences on each state-by-state approach and what those jurisdictions care about.
While there has been a litany of legislation introduced to better clarify the status of online sweepstakes games, there has been relatively little activity surrounding finding ways to meet customer’s needs around digital gaming. Like any other market, consumers will find a way to engage with it if it is something they want to do. But telling that story more effectively to legislators, policymakers, and media is critical to driving success in these legislative discussions.
#3: Cannibalization
As the online casino debate has continued, studies have been released that show both the economic benefits and harms of online casino and its relationship to land-based casinos. Certainly, the economic investments and jobs created as a result of land-based casinos should not be ignored. These companies have made significant investments in their markets and ensuring a vibrant land-based casino environment remains intact should be a clear goal of any online casino legislation.
What should also be considered is how the land-based gaming experience has changed over the last few years. As a gambler and particularly a table games player, I’ve seen firsthand the changes that land-based casinos have made to make the experience worse for players. Whether it be dramatic increases in table game minimums, changing odds to better favor the house or fewer table games positions overall, the experience is materially worse than it was pre-COVID. When I visit my parents in New Jersey, I really enjoy playing lower limit blackjack, both because I find I get more value for my money but also because it is a completely different experience from when I visit a land-based casino.
While the industry’s growth and recovery has been nothing short of incredible over the last five years coming out of COVID closures, that gravy train is beginning to slow down. According to the American Gaming Association, commercial gaming only grew by 0.6% in 2024. While Q1 2025 shows a slight increase in growth to 1%, there is no sign of a material change with no new markets coming online in the near term and no major casino openings on the horizon.
The land-based casinos need to figure out how to jumpstart growth, and understanding how digital options can help with that is paramount. While cannibalization should be a consideration in legislative discussions, it needs to focus on real impacts and not just protection for the status quo, which has already begun to see growth stagnate.
As a keen observer of the gaming policy environment in the U.S. over the last dozen years, I have seen how different legislative initiatives have succeeded and failed. Unless online gaming proponents shift their approach, we’ll continue to see real challenges in passing legislation to enable new markets. By taking more of a public affairs approach, I believe the industry can find an effective, consumer-driven approach that can bear fruit to open new markets and new opportunities.
