Assessing the Societal and Economic Impact of iGaming
by
- Published:
- Last Updated:
An emerging coalition, encompassing diverse stakeholders from the land-based casino industry, has issued a cautionary statement highlighting the potential societal and economic repercussions associated with the iGaming sector.
iGaming’s Societal and Economic Impacts Counteract Revenue Gains
The National Association Against iGaming (NAAiG) emphasizes the well-documented economic and social risks that accompany the expansion of online casinos. As a result, the association is set to rally local communities and lawmakers to challenge such expansions.
To underscore the gravity of this issue, a recent study by The Innovation Group, commissioned by the association, delves into the perceived advantages of broadening the iGaming landscape.
Although iGaming may indeed lead to a significant increase in turnover and consequently a tax boon for states embracing it, the long-term societal and economic implications could outweigh these short-lived financial benefits, according to the NAAiG’s analysis.
The association has detailed several significant repercussions of legalizing iGaming:
- Primarily, the land-based gambling sector typically experiences a 16% decline in revenue following iGaming legalization, resulting in job reductions and a decrease in economic output amounting to hundreds of millions of dollars.
- Projections indicate further job losses, with approximately 4,921 positions potentially being eliminated in New York and 4,733 in Illinois by 2029.
- The study suggests that the legalization of iGaming poses threats to state gross domestic products, leading to economic downturns.
Regarding the additional tax revenue that iGaming might generate, the association argues that when considering the associated societal and economic costs, the net tax benefits are minimal at best, particularly as the number of problem gamblers rises.
Furthermore, employees in the land-based sector are likely to face other challenges. Due to iGaming, workers in traditional casinos may experience slower wage growth.
Established Risks of Online Gambling
Overall, the key findings of the new study resonate with earlier research, warning that the legalization of iGaming contributes to:
- Higher gambling addiction rates
- Reduced economic productivity
- A shrinking job market
The study is thoroughly worth examining to grasp the full extent of the issues presented. The association also warns that iGaming contributes to an increase in underage gambling, with 26.4% of adolescents involved in online gambling developing gambling disorders.
Commenting on these insights, Mark Stewart, Executive Vice President and General Counsel of The Cordish Companies, stated:
‘The unrestricted access to gambling via cell phones through iGaming represents poor public policy that jeopardizes local employment and businesses, imposing financial burdens on states. When the escalating social costs, including heightened rates of underage and problem gambling, are factored in, the net tax revenue results are consistently unfavorable for every state.’
His colleague, Jason Gumer, Executive Vice President and General Counsel at Monarch Casino & Resort, Inc, highlighted the increased financial instability risk for vulnerable individuals due to iGaming.
Currently, only a few states have legalized online casinos, while a larger number have regulated online sports betting.