Lawmakers Rethinking In-Person Registration Requirements For Online Sports Betting
The coronavirus pandemic has lawmakers in at least two states rethinking the wisdom of laws that require customers to visit land-based casinos to activate their online sports betting accounts.
With casinos across the country forced to close for months on end and still facing the prospect of additional lockdowns, in-person registration is even more burdensome now than before the pandemic hit US shores.
If in-person registration was an inconvenience before the pandemic, it became a dealbreaker when casinos closed entirely. And even now, as casinos reopen, the idea of visiting a potentially crowded retail sportsbook to register an online betting account is even less appealing.
Every state’s gambling industry suffered under the resulting lockdowns, but some states fared better than others. While gambling revenue dropped to zero in some states, those with online sports betting and gambling made the best of a difficult situation.
New Jersey and Pennsylvania stand in sharp contrast to states that lack legal online gambling. While gambling revenue dropped to nothing in some states, New Jersey and Pennsylvania were better able to weather the storm with online sports betting and gambling delivering revenue all the while.
Mobile sports betting also suffered during the lockdown when nearly every major sports league paused operations, but it quickly recovered in states that permit remote registration once leagues resumed play. The experience has legislators in some states rethinking the issue of in-person registration.
Where In-Person Registration Stands Now
Four states mandated in-person sports betting registration at some point in 2020.
Illinois, Iowa, Rhode Island, and Nevada came into 2020 with laws on the books requiring customers to visit casinos in-person to activate online betting accounts.
However, in-person registration’s days may be numbered.
Rhode Island ended its in-person mandate in July, and Illinois has suspended its in-person registration mandate multiple times since the beginning of the pandemic. Meanwhile, Iowa’s in-person registration mandate is set to expire on January 1st, 2021.
That leaves Nevada as the only state that hasn’t budged on its in-person registration mandate. Some of the state’s biggest casinos have been advocating for remote registration for years to no avail, but the pandemic has bolstered their arguments.
Is In-Person Registration on Its Way Out?
In-person registration mandates have certainly lost some of their luster in the wake of COVID-19. With two states taking action to permit remote registration and a third on target to end at the beginning of 2021, it seems in-person registration is on its last legs.
However, it is still too early to count it out for good. There are rumors that Mississippi casinos are now pushing for in-person registration should the state legalize online betting. That’s according to The EKG Line, a biweekly newsletter from the Sports Betting & Emerging Verticals team at Eilers & Krejcik Gaming.
Something worth keeping in mind is that individual states and their industry stakeholders have their own goals, motivations, and challenges. What works for one state may not provide the desired outcome in another.
Why Casinos Want In-Person Registration
Without attempting to read casino operators’ minds, there are two likely reasons some insist on in-person registration despite its unpopularity among customers.
A common concern casino operators cite when advocating for in-person registration is the risk of online betting cannibalizing their retail business. That is, they fear customers who can register remotely and bet online will have little incentive to visit the casino, where higher margin gambling, entertainment, and dining offerings await.
That concern appears increasingly unfounded. As the National Conference of State Legislatures noted in a recent brief, many in the land-based casino industry are beginning to view online gambling as additive to their land-based offerings:
On recent webinars hosted by the National Council of Legislators from Gaming States, industry representatives expressed confidence that online gambling would benefit brick-and-mortar casinos rather than cannibalize their revenues. Thomas Winter of the Golden Nugget, a land-based casino chain that also runs an online gaming platform, called this fear a misconception. Jay Snowdown of Penn National Gaming pointed to the increase in both traditional casino revenue and online gambling revenues in New Jersey and Pennsylvania after the introduction of iGaming in those states as potentially indicative of its win-win nature.
New Jersey posted record gambling revenues in 2019, and it did so despite online gambling revenue showing significant year-over-year growth. Online gambling not only adds to the state’s revenue numbers, but it does so without cannibalizing retail revenue.
As experience proves cannibalization concerns unfounded, the other likely and unspoken reason some casino operators desire in-person registration is to protect their turf. Land-based casinos that occupy prime real estate extend that competitive advantage to the internet when they convince lawmakers to mandate in-person registration.
Most bettors who live near a casino are unwilling to drive further to sign up for an account at a different online sportsbook run by a competing casino. Therefore, in-person registration mandates benefit casinos that operate near major markets at the expense of casinos located elsewhere.
The Arguments Against In-Person Sports Betting Registration
In-person sports betting registration comes with three significant drawbacks.
The most obvious drawback is that it is inconvenient. In-person registration inconveniences customers but provides no benefits over remote registration.
Additionally, in-person registration is anticompetitive. A study conducted by iDEA and Eilers & Krejcik found that 80% of bettors would not drive more than an hour, and 13% would not drive any distance at all to activate an online betting account.
As the study’s authors noted, the result is a less competitive market in which online sportsbooks compete based on physical location rather than quality.
A third drawback is that remote registration results in licensed sportsbooks losing potential customers to illegal, offshore providers that offer convenient online registration. Customers, particularly casual bettors who don’t follow the industry, may not even realize that offshore providers operate illegally.
The result is licensed sportsbooks miss out on potential customers, the state loses out on tax revenue, and customers are left exposed to the risks posed by unlicensed, unregulated operators.
Wes Burns has more than a decade’s worth of experience as a writer, researcher and analyst in the legal gambling industry and is co-founder of BettingUSA.com. As a former professional online poker player, Wes approaches his work from the viewpoint of players.
