By Charles Gillespie, Chief Executive Officer, Gambling.com Group
2023 was another banner year for online gaming, and as we turn the corner with 2024 in full view, the future of the industry continues to look bright. Online sports betting is poised to continue to expand into key states like North Carolina, with Georgia and Minnesota making significant legislative progress that could help them join the 29 states that have already authorized online sports betting. iGaming – digital versions of casino games - continues to gain traction, albeit somewhat slower than sports betting’s meteoric rise, and could expand in several key states in the near future. Here are some trends to look out for in 2024:
1. iGaming Elbows its way into the Spotlight
iGaming continues to thrive in the states that have authorized it, iGaming continues to thrive in the states that have authorized it, generating unprecedented revenue in bellwether gaming states like New Jersey and Pennsylvania this year. In 2024, states like New York will be unable to ignore the money being left on the table by waiting to regulate iGaming, which could produce anywhere from 5-10x of sports betting revenues. Most of lawmakers’ attention will be placed on downstate casinos, but Senator Joe Addabbo is already making plans to introduce legislation to bring iGaming into the fold. iGaming is a naturally complementary product to online sports betting and it will also generate far more revenue across the state than retail casino expansion. It also has the advantage of leveling the playing field for existing upstate casinos, which will be able to expand their digital products to customers statewide.
If you don’t believe that digital gaming is the future, just look at New Jersey over the last three years – iGaming continues to grow steadily while retail casino revenue remains flat. It won’t be long until states are forced to acknowledge that digital delivery is essential, especially as the industry seeks to capture a broader consumer base to supplement the aging demographic of traditional casino visitors. New York could eschew a new wave of iGaming adoption across the country; Illinois, Indiana and Maryland are also exploring iGaming legislation, and it comes down to when, not if, these states decide to take the next step.
2. Tribal Gaming Litigation will Shape Future Digital Gaming Opportunities
2024 will also be pivotal for the future of tribes’ involvement in online gaming – both legally and practically. The intersection of online gaming and tribal gaming has always been a bit uncertain, due to outdated federal law (the Indian Gaming Regulatory Act, 1988) that never contemplated the possibility of tribes offering their products to people not located on tribal land via digital technology. States like Michigan have figured out how to get tribes involved in statewide online sports betting and iGaming through commercial agreements, but it’s been a much rockier pathway in Florida, where litigation over the tribes’ gaming compacts has wound through federal court and is know knocking at the chamber doors in the Supreme Court.
Given that federal circuit courts are split on the question of whether tribal-state gaming compacts can include statewide online gaming authorization, the odds are relatively high that the Supreme Court will weigh in. Justice Brett Kavanaugh, to the chagrin of tribes, has already expressed his skepticism, and even went a bit further by expressing his concerns that a state law giving tribal gaming exclusivity would run afoul of Equal Protection considerations.
There is another case to watch coming out of Washington state, in which Maverick Gaming, a commercial card room operator, is taking dead aim at the use of IGRA to create what they are calling a “discriminatory tribal gaming monopoly.” While IGRA’s authority may seem like settled law, you can never count out plaintiff’s counsel Ted Olson, who was instrumental in the repeal of the Professional and Amateur Sports Protection Act, which allowed states to offer sports betting.
Regardless of how these cases unfold, tribes in Florida and across the nation will be watching this issue closely to determine how they can remain substantial players in the evolving digital gaming landscape.
3. Grey-Area Fantasy Companies will be Under Further Scrutiny
As mentioned above, the U.S. appetite for sports betting continues to generate more revenue than most states have projected, with no signs of hitting a ceiling. But many states are also finding that so-called “prop fantasy” sites, where customers select whether two or more players will hit a certain statistical benchmark, are actively undermining these new sports betting regulation and taxation regimes. Regulators are getting wise that these companies are offering the same bets as sports betting operators under the guise of fantasy sports, which are either unlicensed or subject to less stringent regulatory oversight, and in most states, available to anyone aged 18 or above. In just the past few months, six states, including New York, have cracked down on these “prop fantasy” operators and exposed them for what they are –sports betting businesses operating without paying sports betting taxes. I expect this trend to continue in 2024, giving these prop fantasy operators a choice – pay the same taxes and get the same licenses as sports betting companies or don’t play at all.
Charles Gillespie is Chief Executive Officer of Gambling.com Group (GAMB), a leading performance marketing company for the global online gambling industry.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.