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Study: iGaming in Indiana Wouldn't Seriously Impact Retail Gambling

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A new report by Spectrum Gaming suggests that Indiana's online gambling industry could generate substantial revenue for the state without negatively impacting the land-based gambling sector. The study, commissioned by the Indiana Gaming Commission, examined the potential impact of iGaming on four key gaming segments: retail casinos, digital sports betting, the lottery and horse racing.

iGaming Rollout Doesn't Destabilize Retail Gambling

The report found that while online casinos may slightly temper the growth of retail casinos, they are unlikely to cause a significant decline in revenue. This conclusion is based on the analysis of online gambling markets in other states, including Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia.

Despite some mixed results across these states, Spectrum concluded that Indiana's market characteristics align more closely with those states that experienced growth in retail casino revenue despite the introduction of online casinos.

The report also highlighted the potential for iGaming to enhance the sports betting industry in Indiana. Operators often combine sports betting and online casino platforms into a single app, creating opportunities for cross-selling and boosting overall gaming revenue.

Digital gaming companies on a national scale have discovered that individuals who engage with online casinos and sportsbooks simultaneously tend to do so more frequently than those who choose just one of the options. The implementation of online casinos within Indiana will not adversely affect sports betting, which could prove advantageous.

This seamless union between the two activities encourages an engaging interchange between different sports disciplines. Spectrum's investigation into the relationship between commercial casinos, sports betting and iGaming has provided reassurance that the introduction of online casinos will not impede the success of the Hoosier Lottery or Indiana racing.

Easy Money for the State

Spectrum's analysis projected that Indiana online casinos could generate a total of $2.1 billion in revenue in their first three years of operation, with revenue increasing from $489 million in year one to $880 million in year three. This would place Indiana behind the iGaming powerhouses of Michigan, New Jersey, and Pennsylvania.

In terms of tax revenue, Spectrum estimated that a 20% tax rate on online casino earnings could generate approximately $413 million after three years. A 30% tax rate would yield $619 million and a 45% tax rate would generate nearly $1 billion.

Despite the promising economic potential of online gambling, Indiana lawmakers are hesitant to legalize it until 2025. This cautious approach stems from a 2019 scandal involving an illegal campaign contribution by a gaming operator seeking favorable legislation.

The Spectrum report provides compelling evidence that Indiana could reap significant economic benefits from legalizing online gambling without detrimentally affecting other gaming sectors. As lawmakers consider the issue in the future, they should carefully weigh the potential financial gains against the need for responsible regulation and consumer protection.

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