Indiana Could Have The Best Odds To Legalize Online Casinos In 2024

Posted on May 1, 2023

Indiana state Sen. Jon Ford, president of the National Council of Legislators from Gaming States (NCLGS), recently offered a look ahead at Indiana’s prospects of legalizing online casinos.

Ford, speaking remotely via Zoom because Indiana was amid its annual budget negotiations, was a panelist on an East Coast Gaming Congress gaming industry event panel titled, “iGaming: Is 2023 The Year?”

That was an easy answer: no.

Or as panelist Howard Glaser, the Global Head of Government Affairs and Legislative Counsel for the Light & Wonder company, put it to the audience at the Hard Rock Casino in Atlantic City, New Jersey: “iGaming is dead in every state this year.”

That includes the Hoosier State, where efforts to legalize online casinos in Indiana fell short earlier this year.

There was agreement among the panelists that Indiana and New York seem to be the early-line favorites to add this legal gambling option in 2024.

Ford blamed “a bad fiscal report from legislative services” published in February for turning the tide against online casino legalization. That report suggested that up to 30% of brick-and-mortar casino business would shift to online casino if it is legalized.

That is what the industry calls “cannibalization,” and fears about shifting revenue have not turned into reality in existing online casino states. 

“Frankly, we really question the validity of the report,” Ford said.

The report’s conclusions were in stark contrast to a report last fall from Spectrum Gaming Group. That report found “based on the evidence from the states where iGaming has been introduced, there is little, if any, cannibalization of revenue from established casinos.”

New Jersey is a potential online casinos guide

There was a certain irony to the discussion about Indiana and online casino gaming taking place in Atlantic City, home to all nine of New Jersey’s casinos.

That’s because those concerns mirrored those of casino executives in Atlantic City about a dozen years ago. But online casino launched in the state in 2013, with retail casino operators collecting about one-third of revenue by partnering with online casino operators.

States such as Pennsylvania and Michigan, which also have online casino industries, found that the retail casino visitor and the online casino player have far less overlap than had been feared.

Instead, online casino adds a new revenue stream for traditional casinos – one that proved a crucial lifeline in these states when the COVID-19 pandemic shut down casinos for months in 2020.

Ford said that in Indiana, however, many residents whose communities benefit from having a nearby casino were alarmed at the thought of a new form of gambling potentially harming their local economies.

“We got more pressure from locals than we had expected,” Ford said. “Since COVID, taverns and charity groups benefited from our casino dollars, and they were asking the question, ‘What’s in it for them?’ if we go with iGaming.”

“Next year, the possibility will be pretty good” for online casino legalization efforts, Ford said.

“There are a few things we need to work on, like education,” Ford said. “We have to explain in both chambers what iGaming is and really develop a structure to let locals benefit from iGaming.”

Everyone wants a piece of the pie

Glaser said the latter issue has become a key component in online casino legalization debates across the US.

“The problem is no longer how to expand the [gambling] pie; it’s who gets what piece,” Glaser said.

Glaser called Illinois “a robust gaming state” and noted that online casino is the one missing piece in that state. The proliferation of video gambling terminals (VGTs) in the state complicates that discussion, he said.

“It’s not because the industry didn’t make the argument successfully. It’s because of a fight for dominance, meaning who gets what,” Glaser said.

Shawn Fluharty, a House of Delegates member in West Virginia – one of only six states with legal online casino play – said that states that have not yet acted on the issue are committing “legislative malpractice.”

Fluharty said West Virginia gets triple the tax revenue from online casino operators than from the more prominent sports betting. That’s a typical ratio in the other five states as well.

Event host Lloyd Levenson, a gaming law attorney, told the audience that in New York, unions representing brick-and-mortar casino employees have stepped forward to object to online casino approval.

But Ford said that discussion has not come up in Indiana.

“We need to keep the tax rate as low as possible,” Ford said. “If the tax is too high, people will continue to play [illegally] offshore. We want to entice people to bet legally.”

Photo by
John Brennan Avatar
Written by
John Brennan

View all posts by John Brennan