Opinion: Indiana Should Legalize Online Poker And Casino Games

Indiana is hoping its recently launched sports betting industry will provide its casinos with a much-needed revenue boost. At the same time, the state is leaving a lot of money on the table by not legalizing online gambling.

As a single product state, Indiana sports betting providers will miss out on the direct revenue online casino and poker provides. Not to mention, the capability to maximize revenues through cross-selling. As New Jersey online gambling operators have shown, offering online sports betting without online casino and poker is like leaving the restrictor plates on your racecar.

Single Product Legalization Makes No Sense

From a revenue perspective, if a state is considering legalizing one of the three products, that product should be online casinos.

Online casino produces more revenue than online sports betting, and operators understand online casino is the better opportunity.

But revenue is only one of the reasons states should package online gambling products in legislation.

Here are a few more:

• There’s regulatory overlap. Legalizing online casino games, poker, and sports independently creates redundant laws, regulations, and system testing.
• All three are serviced by a robust black market. If consumer protection is a priority, it’s absurd to provide sports bettors with a legal alternative, while leaving casino and poker players at the mercy of offshore operators.
• The three products are symbiotic. European operators have been screaming this from the mountaintops, and New Jersey has cemented it – online gambling products function best together.
• Online gambling underpins land-based gambling. New Jersey has also demonstrated (as have several state lotteries) that rather than cannibalizing retail gambling revenue, online gambling bolsters it.

Indiana’s Casinos Can Certainly Use The Revenue

Leaving revenue on the table is something Indiana’s 13 casino operators can ill afford.

In the not too distant past, Indiana was nearly a $3 billion casino market. However, like many other markets, new competition has taken a bite out of its revenue.

As the chart below shows, Indiana casino revenue has fallen by more than 25% over the last decade.

How Much Can Sports Betting Help?

As far as US states go, Indiana has a middling population of around 6.7 million people. Despite that, Indiana is one of the strongest casino markets in the country.

A big reason for that is its ability to pull customers from the Chicago and Cincinnati markets. That should translate into a strong sports betting industry, at least in the near-term, thanks to Indiana’s first-mover advantage.

The Illinois sports betting industry saddled its market with an 18-month moratorium on mobile registrations, and Ohio dragging its feet on legalization. That means Indiana will continue to draw heavily from the dense border populations in both states.

Even when the border states are active, Indiana is expected to be a strong sports betting market. In an October 2018 report, Eilers & Krejcik Gaming estimated Indiana sports betting revenue at $56 million in Year 1, and growing to $286 million in Year 5.

That new revenue will certainly help, but it’s a far cry from the $800 million revenue hole Indiana would like to fill.

How Online Casino Can Help More

Indiana could still return to its $3 billion past. All it has to do is legalize something Indianans can already do: play online casino and poker games.

Using New Jersey as a point of comparison, a mature Indiana online casino industry could produce upwards of $400 million annually.

And then there’s online gambling’s proven track record of boosting land-based revenue. So, not only will online gambling provide an additive revenue stream, it will likely bolster land-based casino revenue.

All told, the combination of sports betting and online gambling, coupled with its rising tide effect, can help Indiana capture enough revenue to once again be a $3 billion gambling market. All that’s needed is a legislature willing to add online casino and poker to the mix.