Cannibalization or Collaboration
Maryland spent six hours debating the legalization of online casinos and it all has to show for it is two sides that are miles apart on the cannibalization issue.
The Bulletin Board
THE LEDE: Online casino fight heats up in Maryland during 6-hour hearing.
ICYMI: IL tax hike’s (lack of) impact; CFTC announces roundtables; ICE Barcelona a record-setter.
NEWS: Analysts anticipate $1.5 billion to be bet on Super Bowl LIX.
VIEWS: VGTs are still a hot topic in Missouri.
AROUND the WATERCOOLER: Actual disruption in the RG/PG space?
STRAY THOUGHTS: A little pat on the back.
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The Lede: Cannibalization Concerns Dominate Maryland iCasino Hearing
The Maryland Senate Budget and Taxation debated online casino legalization for six hours in a hearing that iGaming Business’s Jill Dorson described as “spirited.”
The informal hearing (no vote was taken) discussed several other bills before the focus shifted to online casinos. The bill in question is SB 340, sponsored by State Sen. Ron Watson. It is companion legislation to Del. Vanessa Atterbeary’s bill, HB 17.
Without getting into the specific policies of the
Several things stuck out to me:
Cannibalization took center stage
The cannibalization debate isn’t going away and appears to be gaining more supporters. In addition to Cordish and labor unions, PENN Entertainment opposes the legislation (but, notably, not online gambling). The company appears to be positioning itself as pro-online casinos but on land-based-friendly terms. PENN’s opposition is a horrible development for legalization efforts.
As iGaming Business noted, Penn Entertainment’s Caitlyn McDonough testified that her company opposes the bill but not online gambling, as PENN believes there is a better way to create a framework more complimentary to existing land-based casinos.
Cordish also hit back at claims its stance is hypocritical, as it operates online gambling in Pennsylvania (Pennsylvania will come back up in the next bullet point). As Cordish’s Mark Stewart explained, Pennsylvania legalized online casinos before Cordish was licensed — and as I’ve argued previously, Cordish’s stance is logical.
Both sides are using sleight of hand
Watson noted he sent each member of the committee data from Pennsylvania that shows across-the-board increases in gambling revenues and more jobs following the legalization of online gambling, calling cannibalization a fallacy.
As Jessica Welman said on X, “Having read many, many studies, I will say I am increasingly convinced this is not a clear-cut issue.”
I’ve tackled this topic many times, including here and here.
The statement does not mention the new brick-and-mortar casinos that were part of the expansion bill or the legalization of online lottery products. The aforementioned Cordish-owned Live! Casino Pittsburgh opened in 2020, and smaller mini-casinos (Hollywood Casino Morgantown and Wind Creek Steubenville) are juicing the overall numbers.
Yes, the total market has grown, but this isn’t a rising tide lifts all boats situation.
Bobbi Jones, the general manager at Ocean Downs Casino in Maryland, told the committee she saw the “significant negative impact” when she was at a sister property in Pennsylvani . Per iGB, Jones testified the Presque Isle Casino saw a “15% decrease in revenue and had to release 45% of its employees.” Notably, both casinos are owned by Churchill Downs, which is almost as anti-online as Cordish Companies.
As Wynn CEO Craig Billings said last year, the cannibalization is reductive: “As an operator, the TAM doesn’t pay my bills, my share of it does…”
As I said, this is a both-sides problem, as Stewart’s claim that 24% of casino jobs disappeared in Pennsylvania after online gambling launched fails to mention a little thing called COVID-19, which shut down the entire country about eight months post-online casinos launching. The COVID pandemic changed the way casinos operated when they reopened.
The industry’s arguments are growing stale
I was happy to see Shawn Fluharty pull off a reverse-Abboud, taking out his phone and showing how easy it is to gamble online in Maryland right now.
Former New Jersey Division of Gaming Enforcement chief David Rebuck also made a good point when he said Maryland would be launching with 13 years of experience, as it can draw on New Jersey's and other states' experiences.
Otherwise, the arguments for online casino legalization are just the same talking points the industry has ineffectively used for a decade — eliminating the black market and tax revenue.
The arguments are sound, but they don’t resonate. One side cites Harvard studies, and the other uses industry-commissioned analysis to debunk the other’s claims. The industry needs a new approach.
Maryland is unlikely to make a serious iCasino push until 2026
Passage in 2025 seems unlikely. The opposition has its heels dug deep into the ground, and with the proposal calling for a 2026 ballot referendum, there is no sense of urgency to get something done this year.
ICYMI: IL Tax Hike Impact; CFTC Announces Roundtables; ICE Barcelona a Record-Setter
Analysts: Illinois tax increase is having little to no impact: An interesting little nugget from the team at JMP Securities concerning the effects of Illinois’ tax increase on suppliers: “To this point, Sportradar has not seen any material impact given the adjustments to the operating structure of most operators in the state. We believe this bodes well for the two data suppliers, as regulation appears to have little to no impact on revenue streams.”
CFTC announces roundtables on prediction markets and digital currencies: If you are expecting decisive action on prediction markets or crypto policies, think again. The Commodity Futures Trading Commission has announced a series of roundtable discussions over the next several months. Per the press release [bold mine], “Commodity Futures Trading Commission Acting Chairman Caroline D. Pham is launching a series of public roundtables on evolving trends and innovation in market structure, including issues such as affiliated entities and conflicts of interest, prediction markets, and digital assets.”
Inaugural ICE Barcelona (and iGB Affiliate) set new conference record: Clarion Gaming has pre-confirmed that the 2025 Barcelona editions of ICE and iGB Affiliate will go down as the best-attended gaming conference in history, breaking the record set last year by at least 10%. “We are confidently predicting an attendance of at least 56,000 industry professionals which exceeds the previous high of 52,345 set 12-months ago in London,” the press release says.
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News: Super Bowl Betting Estimates; Similar but Different
Eilers & Krejcik Gaming (a newsletter sponsor) and Eric Ramsey at Legal Sports Report have published estimates for Super Bowl LIX. Both expect betting on this year’s game between the Chiefs and the Eagles to be worth $1.5 billion. The team at JMP Securities has a slightly higher estimate of $1.75 billion.
Ramsey expects Nevada to lose its crown as the Super Bowl betting capital of the world to New York, despite Super Bowl LVIII setting a record for single-game handle in any market. However, Las Vegas hosted last year’s game, which is why Ramsey believes New York, with its massive population advantage, will overtake Nevada.
Per Ramsey’s analysis, “Applying its growth over the past 12 months to last year’s Super Bowl numbers creates around $192 million in expected handle this year, up 18.3% from $162 million in 2024. Nevada would have to shake off a small annual decline and top its own record to approach that number.”
EKG believes Nevada will remain at the top, with a total handle approaching $200 million. The firm estimates New York’s Super Bowl handle will be on par with last year’s $161 million tally.
Views: VGTs Are Back on the Menu in Missouri
One issue prevented the Missouri legislature from legalizing sports betting: VGTs.
VGT supporters wanted both issues addressed simultaneously, and when they didn’t get their way, they blocked sports betting legislation for several years. However, after voters passed a ballot referendum legalizing sports betting, VGT supporters can no longer use sports betting bills as an entry point.
In 2025, the VGT legalization effort, sponsored by State Rep. Bill Hardwick (HB 970), is on its own and running into stiff opposition from the state’s casino industry.
At a hearing on Monday, “opponents of VLTs argued against the expansion of gambling in Missouri,” per St. Louis Public Radio.
“Sports betting barely passed,” Rep. Emily Weber said, referencing Amendment 2 from 2024. “Gambling in Missouri is not an overall thing that Missourians love.”
Other lawmakers were concerned that municipalities couldn’t opt out. “St. Louis just can’t say, ‘We don’t want this,’” said Rep. Elizabeth Fuchs, D-St. Louis. “Or Springfield can’t say, ‘We don’t want this,’ at the start.
Hardwick and other legalization supporters argue that the machines are already widespread in bars and convenience stores and are simply unregulated.
Still, just as VGT supporters blocked sports betting legislation, the even more politically powerful casinos are going to make sure VGTs aren’t legalized.
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Around the Watercooler
Social media conversations, rumors, and gossip.
Congrats to my friend Jamie Salsburg (and Mark Checkwicz) for pulling off a coup and breaking through the phalanx of usual gatekeepers to offer a new perspective on the gambler’s mindset, a critical step in mitigating the social harms of gambling.
The course is broken up into three modules with the following objectives:
Explain why people gamble and the gambler’s mindset.
Demonstrate your understanding of today’s connected gamblers by identifying at least one type of gambling opportunity and one type of recovery resource available to them.
Describe the impact of gambling on experiences and people.
Stray Thoughts
Milestone Alert!
Next month, the Straight to the Point newsletter will surpass 1,000,000 views, a number I never believed possible when I launched it in August 2023.
Monday was also the first time the newsletter surpassed 5,000 views in a single day (yesterday’s newsletter also broke 5,000).
One of the next areas I would love to increase is engagement. So please hit the like and share buttons. There is also a comment section, so feel free to reply or ask questions.
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