The Only iGaming Expansion This Year May Come from Within

More brands, more games, and more handle are all possibilities within existing iGaming jurisdictions.

Mar 18, 2024 • 13:08 ET • 4 min read
iGaming Bally's
Photo By - USA TODAY Sports

It’s hard out there lately for the pro-iGaming crowd. While Maryland is still flirting with the idea of authorizing online slots and table games this year, the odds are growing longer for any U.S. state to pass an iGaming bill in 2024.

That’s tough for the online gambling industry, which is counting on the predictable profitability of iCasino to power them to consistent profitability overall. What’s even tougher is there is no guarantee in 2025, 2026, or 2027 — you get the idea — that the pace of iGaming legalization will pick up. 

There are several reasons why, such as solid state budgets, fears of “cannibalization,” and a lack of education and interest. Also, many states legalized sports betting relatively recently, and lawmakers are now being asked by the same folks who wanted event wagering for online casino gambling as well. 

You may never get anything unless you ask for it, but this ask could be seen as a bit hasty. Most states would rather revisit their laws and rules for online sports betting, which they may no longer be happy with given the benefit of hindsight. Shooting your shot for iCasino while lawmakers and regulators are still grumbling about commercials for DraftKings and FanDuel may not sit right with state legislators. 

So what does that mean? To me, it means that the only sure bet for further iGaming growth this year is within the industry itself and within markets that are already open. And, based on some recent comments and corporate developments, the potential for self-improvement is there.

More brands, more games, and more handle are all possibilities within existing iGaming jurisdictions. Some more time to reflect could be good as well, allowing operators to refine their arguments and find new allies. But the growth starts from within.

Let’s begin with FanDuel, the leader in online sports betting in the United States. When you think about casino gambling, is FanDuel the first name that springs to mind? Maybe not! But does FanDuel want to change that? Probably yes!

Notably, FanDuel’s chief rival, DraftKings, made a splash by purchasing Golden Nugget Online Gaming Inc. (GNOG), a recognizable name in casino gambling.

Chris Grove, the co-founding partner of Acies Investments (among other titles), recently pointed out that FanDuel tried something similar with Boyd Gaming’s Stardust brand, albeit with less success. He suggested there is more the operator could do to compete for iGaming business, including by putting a new name out there. 

“[FanDuel still has] the opportunity to bring a strong, casino-first brand to market in the U.S.,” Grove said at the NEXT iGaming and sports betting summit in New York earlier this month. “I think there's quite a bit of potential there, especially if you look at what DraftKings has done with GNOG."

More skin in the game

Caesars Entertainment Inc. is already pursuing this sort of tactic, as the traditional brick-and-mortar casino operator is developing a new mobile casino brand to go with its sports betting platform and its flagship Caesars Palace Online Casino app. 

What's more, in February, Caesars announced it had struck a deal to buy WynnBET’s iGaming business in Michigan. Along with a partnership with the Sault Ste. Marie Tribe of Chippewa Indians, the arrangement will give Caesars an additional online casino skin in the state. 

The Caesars-by-another-name strategy is one rival operators could try to replicate.

“We expect the launch of a 2nd proprietary skin, in each of CZR's live states, in 2024, to serve as the next leg of growth for CZR on the iCasino side,” Deutsche Bank analyst Carlo Santarelli wrote in a note to clients on Sunday. “Recall, with the skin purchase in Michigan, CZR will be able to launch a 2nd branded skin in each of its 4 iCasino markets. We expect; 1) the brand to be highly visible, 2) launch costs to be minimal, and 3) the skin to scale relatively quickly.”

True North strong and free

That kind of growth within existing iGaming jurisdictions may be all operators can hope for this year. Furthermore, there are only seven U.S. states with legal iGaming, and just four of those have truly competitive markets, as in Delaware, Connecticut, and Rhode Island there are two or fewer operators to choose from. It’s just Michigan, New Jersey, Pennsylvania, and West Virginia where the industry can truly flex its muscles on the iGaming front. 

That is, of course, unless you set your sights a little further north, toward Canada’s most populous province. Ontario has a population larger than that of any U.S. iGaming state, and its competitive market welcomes all comers with no cap on the number of sites an operator can offer. 

The payoff from growing within existing jurisdictions could be material, too. Toronto-based Rivalry Corp., known for catering to esports bettors and fans, launched a proprietary iGaming platform in March 2023; a year later, casino accounts for around 50% of the company's handle.

PointsBet shed its U.S. sports betting business by selling it to Fanatics. Yet the Australia-headquartered company maintained a presence in Ontario and recently allied with Strive Gaming to bolster its online casino product there.

Comments by PointsBet's chief executive suggest they see room to grow within Ontario, including by attracting customers who think about blackjack and slots first, and then maybe basketball and soccer second.

That effort, the company hopes, will be helped by its partnership with Strive.

“We expect this new offering will accelerate the growth of our online casino business, helping drive a more favorable game mix over time with higher gross margins, along with enhanced retention and customer lifetime values,” PointsBet CEO Sam Swanell said recently. “Importantly, with an improved online casino product, we will now be in a position to target with our marketing casino-only players, rather than sports players who are cross-sold into online casino.”

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