Light & Wonder Makes The Case For Online Gambling At NCLGS

Unlike sports betting, online gambling has had a tough go of it. There are many reasons for the slow adoption of online gambling in the U.S., some legitimate and some not. Many of the reasons were up for discussion recently. 

The National Council of Legislators from Gaming States (NCLGS) Conference brings together the gaming industry, lawmakers, and regulators from around the U.S. to discuss the current state and future of gambling at the state level. 

During the most recent conference in Denver, Colorado, a panel on online gambling (casino and poker) turned into an education session when Light & Wonder, global head of government affairs Howard Glaser spent much of his time debunking several myths about online gambling.

Myth No. 1: Online Gambling Cannibalizes Brick-and-Mortar Gambling 

During the NCLGS session, other panelists pointed out that cannibalization was a serious concern among brick & mortar establishments, particularly in New Hampshire, where “casinos” is a very loose term describing a small charity gaming facility with very high table game fees. 

The cannibalization myth has been around since the first appearance of online gambling. It was strongest during the height of the Poker Boom, kept alive by Sheldon Adelson, founder of the Las Vegas Sands, which owns several brick & mortar casinos, and some other online opponents throughout the 2010s, and still, somehow persists. 

No matter what data is presented (10 years of online gambling in New Jersey, online lottery in several states, or brick-and-mortar poker room numbers now compared to the online boom years), this myth simply refuses to go away. 

Glaser tried to assuage those fears, noting that L&W’s research shows the opposite, that online gambling is beneficial to brick-and-mortar gambling when online offerings are tied to rewards at terrestrial casinos. 

Myth No. 2: It’s More Difficult to Monitor Players Online 

An even more absurd myth that surfaced during the panel is that online gambling is anonymous. The argument is that since you can’t see the customer, you don’t know who they are and can’t spot problematic play. 

Julia Patterson, vice chairwoman of the Washington State Gambling Commission, was one such critic, saying disordered gamblers could not be properly monitored online. 

But Glaser noted online sites have far better checks in place, as customers must register and undergo a KYC check before they are allowed to gamble. “We know our online players better than we know most traditional players,” Glaser said.

Further, every bet is tracked online. There are no cash-only customers or guesstimates based on what a player is observed betting. That allows better monitoring of play and the ability to target customers with finely tailored responsible gaming messages. 

In the current environment, operators are the ones with the data. Still, more and more states are commissioning studies and using raw data to help them better understand gambling patterns and develop responsible gambling policies. 

Myth No. 3: If Online Gambling Is Illegal, It’s Not Available. 

The general belief is that if online gambling isn’t legalized, it’s unavailable. That couldn’t be further from the truth. As Glaser noted, legalization would move a lot of the current money traveling offshore into domestic businesses and state coffers. 

Regardless of legality, anyone in any state can register an online gambling account. Offshore online gambling sites have been available since the Mid-1990s and every state that legalized sports betting on the basis of stamping out the black market should ask itself why casino and poker players don’t deserve the same protections. 

The idea that legal online gambling sites will cannibalize brick-and-mortar casinos but unregulated, offshore online gambling sites doesn’t just doesn’t make much sense. 

How Money Relates to What States Want Online Gambling

These myths have definitely held online gambling legalization in the U.S. at bay, but they’re not the only reason. As I said in the opening, there are legitimate and illegitimate reasons for online gambling’s struggles. 

Glaser highlighted that money is the first reason a state will look at online gambling. If a state doesn’t need money, then passing an online gambling bill is likely a low priority.  

He also pointed out an often-overlooked element of online gambling, the equal playing field it creates. That can be a double-edged sword, as the current market leaders may not want to give competitors an equal opportunity to compete for any part of the market. 

A top-performing casino in a heavily populated area may want online gambling, but if it means a competitor in a far-flung corner of the state can compete on equal footing online (and entice brick-and-mortar visits), that same casino may suddenly oppose online gambling. Better to keep the status quo than allow a competitor to strengthen their position.

Conversely, if a bill is structured in favor of the bigger properties, that casino in a far-flung locale may have a legitimate reason to fear cannibalization, not from online gambling but from a competitor offering a far better online product and poaching their regular customers with land-based rewards.