For many, gambling is an emotive subject. Some people love it. The anticipation, the thrill, and what-ifs that form while waiting for the result. However, some people and communities object to gambling on moral grounds; these could be related to religion, morals, or traditions. The USA has always had a strange relationship with gambling ranging from total prohibition to Las Vegas marketing itself as the world’s gambling capital. Ever since the Supreme Court overturned the 1992 Professional and Amateur Sports Protection Act that had served as a blanket prohibition on state-sponsored sports betting, state after state has opened up to legalized gambling. Before the ban was lifted, it was estimated that Americans wagered $150 billion illegally every year.
That $150 billion figure illustrates that banning something does not make it go away; it simply drives it underground. While some states like Utah and Hawaii will never legalize gambling, many others are looking at the trailblazer states like New Jersey or overseas to Europe and seeing that regulated gambling can bring significant revenue to state coffers.
The state of New Jersey pushed for the change to the law, and New Jersey immediately passed laws that allowed Monmouth Park to begin to take sports bets. The state had licensed legalized online casinos and poker rooms in 2013, and by August 2018, the first online sports books in the state were opened.
We can learn from New Jersey alone that gambling is big business. In September 2018, the state handled $1.01 billion in wagers. The lion’s share of this came from igaming at nine casinos and three racetracks. In addition, according to the New Jersey Division of Gaming Enforcement, $92.7 million was spent online.
What really matters to the states that have legalized online gambling is the revenue it generates for private operators and their shareholders and the taxes levied for the state. For example, the latest figures from the New Jersey Division of Gaming Enforcement are as follows:
“For the month of June, Internet Gaming Win reported by casinos and their partners was $133.1 million, reflecting growth of 24.4% compared to $107.1 million for the prior period. For the year-to-date period, Internet Gaming Win reported by casinos and their partners was $814.5 million, reflecting growth of 28.4% compared to $634.2 million for the prior year-to-date period.
Sports Wagering Gross Revenue: Sports Wagering Gross Revenue reported by casinos, racetracks, and their partners was $39.2 million for June 2022, reflecting a 44.9% decrease when compared to $71.3 million in the prior period. Sports Wagering Gross Revenue reported by casinos, racetracks, and their partners was $308.7 million for the year-to-date, reflecting a 16.2% decline when compared to $368.3 million for the prior period. ”
UK companies had highly developed gaming software and technology. The best NJ online casino was able to integrate the existing games onto its platform to get it up and running quickly. The European operators had been working in legalized markets for years. So rather than try and reinvent the wheel, states that have legalized iGaming have imported the technology and business acumen from businesses that already knew what they were doing.
This model was followed up by all the states who went on to legalize iGaming. There are now 21 states where sports betting is legal. In Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia, residents can play online casino games, including table games like blackjack and roulette and a wide variety of online slots. The technology behind these games comes from European brands. They already have an extensive portfolio of games backed up by the top software providers in the world. They also have developed the best algorithms to spot potential gamblers and prevent gambling harms where possible.
There is constant innovation in this market. Companies are constantly bringing out new slot games to ensure that there is something for players to enjoy. In addition to the enhanced graphics and animations which make exciting virtual gaming online possible, gamblers can now play games with a live dealer without leaving the comfort of their own homes.
While the US might have been behind the UK and other countries in legalizing online gambling, the US land-based casinos are now looking to buy up the European pioneers. MGM has recently agreed to purchase Stockholm-headquartered online slots company LeoVegas.
The states that have legalized iGaming are finding that they are not only gaining revenues through taxation but are attracting tourists’ money too. Americans no longer have to go exclusively to Las Vegas to be able to enjoy a flutter. To gamble legally, a player must be physically present in their gambling state. They do not have to be permanent residents. This means that sports fans can enjoy a gamble on the game’s outcome. As well as the revenue from the gambling tax, a state like Pennsylvania can also benefit from hotel revenues from people attending the game or placing a bet from their holiday accommodation.
The most significant barrier to entry for operators is the high cost of doing business in a state like Pennsylvania. The tax rate in the state is effectively 36%, and operators have to pay an upfront $10 million licensing fee. As more states open up, will they need to start competing against each other?