Some intense debates in the gambling industry are more well-worn than others.
While the new kid on the block, the prediction market and the sports events contract, was a heated topic of discussion at the National Council of Legislators from Gaming States (NCLGS) summer meeting in Louisville, KY, a more familiar face popped up again: cannibalization.
First, Macquarie analyst Chad Benyon cited estimates that iGaming cannibalizes retail revenue by about 15% in the first few years after online casino legalization. Later, legal online gaming advocacy group iDEA Growth co-founder Jeffrey Ifrah asserted that hard evidence doesn’t show signs of danger to land-based casinos.
Things got a little testy on a Friday panel between casino operator Churchill Downs’ Senior Director of Government Relations Shannon McCracken and iDEA’s State Advocacy Director John Pappas.
Et tu, Churchill?
McCracken referenced reports which she said suggested that gaming on a phone is 10 times more addictive than brick-and-mortar casinos.
“You’re putting the most addictive form of gambling on the most addictive device,” she said. She also pointed to the numerous recent failed state legislative pushes to authorize online casino as evidence that lawmakers are not keen on online gambling expansion.
“The momentum is not there.”
In response, Pappas questioned Churchill Downs’ anti-iGaming stance, which the operator has formalized through multiple pieces of testimony in state legislative hearings, as well as its membership of the National Association Against iGaming (NAAiG).
“It’s a bit shocking to me that we’re in the presence of the largest online gaming company in the country in Churchill Downs,” said Pappas. “They offer TwinSpires in 40-plus states to people 18 and over. It is an online gambling platform. So I guess the question would go back to Ms. McCracken, how are you guys addressing these issues on your online gambling platform that you operate now?”
McCracken retorted that TwinSpires is specifically centered around horse racing, an activity she described as “fundamentally different” from iGaming.
“It is an event-based wagering, supporting real-world jobs, agriculture, and it’s regulated by state commissioners, not a non-stop slot machine in your pocket.”
Pappas responded by asking whether the same argument could apply that TwinSpires’ online horse racing is cannibalizing Churchill’s land-based horse racing business. The moderator intervened on the basis of time running out, but McCracken said no.
Asked for any closing questions, Betr’s Andrew Winchell rhetorically asked McCracken whether her logic suggests mobile banking should be banned to protect bank tellers’ jobs, or whether Amazon should be kicked to the curb to ensure more retail jobs.
NAAiG says horse racing is N/A
That’s just a brief glimpse of what happened on the panel itself, but the conversation carried over into social media following the event.
The NAAiG doubled down on McCracken’s comments on horse racing vs. iGaming in a series of posts on X:
“It’s important to correct a common misconception raised today at NCLGS during a panel: not all forms of online wagering are the same,” wrote the association, the membership of which includes Churchill Downs, the Cordish Companies, Monarch Casino and Resort and various other entities, mostly land-based gaming companies.
“Equating regulated pari-mutuel horse racing with 24/7 casino-style iGaming misrepresents both the law and the lived experience of gambling harm,” added the group. “Pari-mutuel wagering is tethered to live events, with pooled bets and longstanding federal oversight. iGaming offers instant, continuous access to slots and table games—’pocket casinos’ that operate on an entirely different risk profile. The difference matters.”
Careful with that coffee
On Monday, Pappas responded on LinkedIn, noting he, “nearly spit out my coffee” at the NAAiG’s remarks and arguing that the association’s argument that there is a fundamental difference between regulated online horse race betting and regulated online casino gaming fails under scrutiny.
“TwinSpire openly advertises the availability of betting on thousands of horse races per week, literally 24 hours a day, accessible online to players as young as 18,” he emphasized. “This continuous availability is hardly distinguishable from other forms of online gambling they seek to criticize.”
He also pointed out that Churchill Downs and Cordish both claim to provide strong age verification tools and player protections for their own online gaming platforms.
“If they can effectively safeguard their online platforms against underage access and addiction, why should other regulated online casino platforms be any less capable?”
“Their active participation in online gambling directly undermines their argument against the regulated online casino industry,” Pappas concluded. “NAAiG’s selective argumentation, contradicting the reality of their own members’ practices, reveals their true interest may be less about consumer protection and more about protecting their own market advantages.”
