By Megan Sayles,
AFRO Business Writer,
msayles@afro.com
The state of Maryland is currently considering legalizing i-gaming, or internet-based gambling on casino-style games. Two bills in the Maryland General Assembly, HB1319 and SB603, would give residents the chance to vote on authorizing online slot machines, roulette, poker and other table games.
If legalized, the assembly predicts i-gaming could generate more than $900 million in gross revenue by 2032. The measure comes after voters approved online sports betting in 2022.
Morgan State University’s Center for Data Analytics and Sports Gaming Research (DASGR) hosted a town hall to explore the opportunities and implications of the legislation on March 15. Part of the argument for legalizing the practice is combating the Black Market that already exists for i-gaming.
“We’re talking about legalizing it in Maryland, but I just Googled online gaming on my phone, and I could start playing in five minutes,” said West Virginia Delegate Shawn Fluharty, president of the National Council of Legislators from Gaming States. “You can play. It’s already there. It’s just not regulated, and you’re not making revenue off of it.”
Not regulated by government entities yet, the i-gaming Black Market can pose consumer protection risks. Betters are vulnerable to financial fraud and unjust gaming practices, and there are no measures in place to curb problem gambling.
“Just like all other forms of consumer products, gaming is going to have a digital channel,” said Scott Gunn, senior vice president of corporate public affairs for International Game Technology. “Policymakers in this state and others should put their imprint on it, rather than let consumers find unregulated sites.”
A primary concern for legalization is i-gaming’s effect on brick-and-mortar casinos. Under the legislation, the establishments would receive their own i-gaming licenses, but some worry that escalation of online gambling will lead to the cannibalization of land-based casinos, putting numerous people out of jobs.
An example of this can be seen in the retail industry, with more people choosing to shop online rather than patronize physical stores.
“Operators are always concerned that if they go online with their services, they might lose money, and along with losing money, they might lose jobs. No one wants to bring in a new legal business where jobs are going to be lost, especially post-COVID,” said Jeff Ifrah, online gaming attorney and founder of iDevelopment and Economic Association (iDEA). “Everyone’s trying to get back to normal, which means we want casinos to have the revenue they had before.”
A study commissioned by the Maryland General Assembly reported that i-gaming would be responsible for a 10.2 percent decline in gross gaming revenue (GGR) for brick-and-mortar casinos. By 2032, the study forecasted that Maryland casinos would lose $222.5 million as a result of internet gambling.
Ryan Eller, executive vice president and general manager at Live! Casino and Hotel Maryland, said his establishment experienced a 70 percent decline in visitation when online sports betting was legalized in 2022. He expects i-gaming to follow suit.
“It certainly isn’t my fear that Maryland Live!, which employs close to 3,000 people and has a great deal of livelihoods associated with it, would go the way of the local strip mall and become vacant. The sky is not falling in that respect,” said Eller. “But, it would have similar impacts. If cannibalization does materialize the way we anticipate that it would, some of the stores in our mall would inevitably go dark.”
However, four Maryland casinos, Rocky Gap Casino and Resort, Hollywood Casino, MGM National Harbor and Horseshoe Casino, have expressed their support for i-gaming during a House Ways and Means Committee hearing.
Proponents of the bill have also cited a study from Eilers and Krejcik Gaming (EKG), commissioned by iDEA, that determined i-gaming will have a positive impact on revenue for brick-and mortar casinos. The report examined states like New Jersey, West Virginia and Michigan, which already operate live and online casinos.
It found that the states’ land-based casinos experienced a 2.44 percent quarterly revenue increase after legal i-gaming was enacted. The study concluded that, in a typical U.S. state, i-gaming would have a 1.7 percent positive impact on revenue for physical casinos.
“Online gaming is a different way to approach a new consumer. It’s not an existing consumer who is going to choose this instead of that,” said Ifrah. “It’s someone new and that provides a new opportunity because not everyone goes to land-based casinos.”
Megan Sayles is a Report for America corps member.
