SEACAUCUS, N.J.. – With only six states currently allowing legalized real-money online casinos with interactive slots and table games, iGaming is a popular topic of discussion at the third SBC | Summit North America at the Meadowlands Exposition Center. New Jersey is an appropriate venue because it is a state where both iGaming and sports betting are thriving.
New Jersey’s online casinos generated more than $1.3 billion in gross gaming revenue (GGR) in 2021, of which more than $205.2 million went to the state in tax revenue.
Meanwhile, sports betting (both retail and online) provided Trenton with about $102.6 million.
New Jersey, along with Pennsylvania, Delaware, Connecticut, Michigan and West Virginia all have legal online casinos.
Delaware has recently become a hotspot for iGaming.
These states, plus Nevada, have also legalized online poker.
How iGaming will appear in other states
Here in the summer of 2022 – with rising inflation, the cost of daily living, weather conditions, COVID-19 pandemic coming in and out and other state problems – how can iGaming be incorporated and become part of a state that already has sports betting or that is coming into its own?
“From a lobbying perspective, it’s about talking to the states about how the money will be used,” – said Craig Brown, head of delivery at Incubeta, during a three-person panel to build market-ready iGaming strategies with legalized jurisdiction. “Talk to the general public about how it will affect their pockets and that’s what will get politicians listening about the money and the tax implications. That’s what will help,” he added.
New Jersey currently imposes an effective tax rate of 9.75% on retail GGR sports betting, and a robust 14.25% on mobile. iGaming platforms are required to share 15% of their gross revenues with the state.
“I think we have to wait a little bit,” said Todd Cravens, president and CEO of Galaxy Gaming, the world’s largest independent provider of proprietary casino table games, with 6,000 gaming tables located in more than 600 casinos. “One of the things that has happened over the last few years here in the states is that there has been a tremendous amount of federal funding going to all kinds of states. The states that had surpluses coming from COVID, so they really don’t need a whole lot of cash. That will change over the next little while.
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“I actually think as we go further down the road and the states’ budgets get a little tighter and they don’t have federal money coming their way, we’ll see more of that. I also think the opportunities for states like New York, which have a very high tax rate on their sports betting, it gives them the opportunity to say, ‘Look, we need to go in there and do some hedging against iGaming coming down the pike.’ “
Another state where both online casinos and sports betting are legal and coexist is Pennsylvania. Last year, the Keystone State recorded iGaming GGR of more than $1.11 billion. Sports betting retained more than $340.1 million in player wagers. The state currently taxes online slot machines at 54% and interactive table games revenue at 16%. The tax on sports betting is 36%.
“Politically, if you’re a state that has sports betting, has physical casinos, has a lottery in your state, it’s very difficult to have the moral high ground that you’re not going to ultimately allow iGaming,” Cravens said. “I think we have to be very, very careful about how much and how hard we go in. I think responsible gambling also has to be a key part of that.”
One thing is certain: iGaming is on the table for states to at least consider and discuss whether they should make it available to their residents. The knock on the door is looming large.