NAAiG Report Warns of iGaming’s Economic Impact

You will be forgiven if you’ve never heard of the National Association Against iGaming (NAAiG). Founded just a few short months ago, it has remained relatively quiet since its inception. However, the group has stepped into the spotlight with a new study that challenges the belief that land-based casinos and iGaming can grow together.

Comprised primarily of regional casino operators rather than major industry players, it remains to be seen if this industry trade group will have much impact. However, the report it sponsored in partnership with The Innovation Group definitely raised a few eyebrows.

 Its headline assertion is that states that enact iGaming can expect a 16% or more decline in land-based casino revenues, resulting in job losses and reduced tax revenue.

This study could have an outsized impact in states like Maryland and Louisiana, where Cordish Gaming, the largest of the NAAiG members, operates and where robust discussions are taking place on legalizing iGaming. Jack Entertainment is another founding member, and Ohio, where they operate, is also on the perennial list of states eyeing iGaming legislation.

The study says that iGaming causes sharp declines in economic activity and cites potential GDP losses in Ohio of $600 million and $370 million in Maryland. In Colorado, where Monarch Casinos, another of the group’s members, operates, the damage is $313 million. 

The impact could be so severe in some states, notably Louisiana and especially Mississippi, where NAAiG members Churchill Downs and Foundation Gaming have a presence, that the states could see a net revenue once all the costs due to higher than usual rates of problem gambling and a population with much less disposable income that it can afford to lose.

Job losses alone are estimated at more than 2,600 in Louisiana and about 1,900 in Mississippi. In larger states like Ohio, job losses could exceed 2,800, and labor-related tax declines would be more than $200 million, not counting another $500 million in reduced gaming tax revenue.

The study states that gambling problem rates among online players are nearly eight times higher than among traditional gamblers. It also claims that over 80% of individuals with gambling addiction place at least some bets online.

One of the study's more striking claims is that iGaming can lead to increased underage gambling, presumably as a result of being bombarded with iGaming advertising both on television and online, but then goes on to say that almost a quarter of those underage gamblers will acquire some form of gambling disorder.

While the study paints a bleak look at an issue being discussed in over a dozen state legislatures this spring, it remains to be seen what pushback it will receive from those on the opposing side. 

Existing revenue data from iGaming states like New Jersey, Pennsylvania, and Michigan suggest that fears of cannibalization may be overstated. This is further backed by recent Penn State Study. Nonetheless, it’s certainly not an issue that will disappear anytime soon and will resurface every time any of the states consider legalizing iGaming.

At the same time, the upstart NAAiG, despite lacking the deep pockets of its opponents, may wield significant influence through hard-hitting studies like this one. The headlines they generate could be enough to make hesitant legislators think twice before moving forward with iGaming, at least until more definitive data emerges.