Opinion: Nevada Online Casino Market Analysis

The Nevada Independent ran an interesting article on the lack of legal online casino gambling in Nevada. The gist of the article is how the world’s most famous gambling market is being left behind as the industry writ large embraces digital betting.  

The article, with the help of several industry experts, makes a sound case for the Silver State to add online casino games to its existing gaming options – the state has legal online poker and online sports betting.

The case is made through the lens of New Jersey and Pennsylvania, the two gaming states that best-weathered the COVID-19 storm, and not coincidentally, have robust online gambling industries.

The problem is Nevada isn’t New Jersey or Pennsylvania. Nevada is Nevada, and there’s no suitable comparison.

Online gambling would certainly be additive and help future-proof the market, but not to the degree that it does in other markets.

As Chris Grove noted in the Nevada Independent article:

“Nevada has a far greater variety of retail gambling outlets, a smaller population, and a greater density of total population proximate to the full range of retail gambling outlets than you’ll find in any other state,” Grove said. “All of that makes precise forecasting of Nevada’s online casino potential a challenging task.”

Why Nevada Isn’t an Important Online Gambling Market

In a general sense, online gambling is for local populations (and populations that generally don’t visit land-based casinos), not visitors, and particularly not visitors who are traveling to a destination that offers 24/7 entertainment and gambling.

Nevada is a visitors’ market, and those visitors are largely there for an experience, not to sit in their hotel room and play online slots.

If visitors aren’t going to drive online revenue, who will?

The state’s population of around 2.7 million people isn’t going to generate a ton of online gambling revenue. In terms of population, and based on New Jersey and Pennsylvania, a high-end estimate for Nevada is around $150 million annually from online casino.

Compared to the state’s total gaming revenue of $12 billion annually, that number will barely register. Basically, Nevada operators aren’t going to focus on online casino because of its revenue opportunity.   

Furthermore, unlike New Jersey and Pennsylvania, the overwhelming majority of Nevada’s population lives extremely close to not just a casino, but many casinos.

That raises the question, does Nevada want to make it even easier for locals to stay home? It’s already fairly convenient to gamble in Las Vegas, so do casinos want to make it more convenient for locals to gamble at home and eliminate any chance of they spend money on food and entertainment?

And by extension, does Las Vegas want visitors to stay in their hotel room and gamble on their phones? Does it want to provide people who visit Las Vegas with online gambling, and do those visitors even want it?

Why Nevada Is an Important Online Gambling Market

Nevada may not have a large population or a population that lives a great distance from a casino, but there is a valid reason for an online gambling push in Nevada: it’s Nevada.

Nevada is home base for numerous casino companies, and virtually every national casino company has a presence in the jurisdiction. Additionally, every company that embraces online casinos build momentum for further spread across the country.

 As such, Nevada could serve as an online casino launching pad for land-based casino companies. It wouldn’t be about money; it would be a chance to test products and build databases of players in other states, should those jurisdictions legalize online casino.

That’s what makes the prospect of Nevada online casinos important, when the industry expands Nevada operators will have national databases filled with visitors from all over the country and tried and tested products to bring to those locales.