The legislative momentum for further legalization of online casino gambling might have slowed recently, but it’s clear the world of digital blackjack, roulette, and slots is crucial for operators of sports betting sites.
The mobile version of Fanatics Sportsbook is live in just Ohio and Tennessee. However, even though it has relatively only begun offering legal sports betting, the operator is also preparing to put its expansive customer database of around 95 million sports fans to use for online casino gambling.
“iGaming will be a core part of the strategy,” Matt King, CEO of Fanatics Betting and Gaming, said Wednesday morning at SBC Summit North America in New Jersey.
The iGaming interest is indeed high among online sportsbook operators, and the numbers they and regulators have disclosed explain why. In New Jersey, for instance, total sports wagering revenue was $93 million in March, while iGaming win was $165.7 million.
Back at SBC Summit North America in New Jersey. Happening now: execs from @FanDuel, @BetMGM, and @BetRivers making it very clear how big iGaming is for their business. While iGaming legislation has slowed, they see expansion as more if than when. pic.twitter.com/rgbvY2nESc
— Geoff Zochodne (@GeoffZochodne) May 10, 2023
King’s session was mostly about Fanatics, but it was followed by an in-depth discussion of iGaming with executives representing BetMGM, BetRivers, and FanDuel. The comments made during the latter session highlighted how crucial iGaming is to the businesses of those operators, and the opportunity they see for expansion.
"Within our business, when we think about the future, I think we spend as much time on iGaming as we do on sports betting,” FanDuel President Christian Genetski said during the SBC panel.
BetMGM CEO Adam Greenblatt noted they are 50% owned by MGM Resorts International, a casino operator.
“So from the get-go, gaming was essential for us," Greenblatt said.
Running the numbers
The numbers remain compelling for operators. Richard Schwartz, CEO of BetRivers-owner Rush Street Interactive Inc., said in markets with both online sports betting and online casino gambling around 75% of revenue is from iCasino.
Schwartz added later that an online casino player is worth, on average, 5.3 times as much gross gaming revenue to RSI as a sports betting-only player. Furthermore, a user who bets on sports and plays in an online casino is worth 14 times as much revenue as a sportsbook-only player.
“It’s very significant,” Schwartz said during the panel. “It clearly is an opportunity for this industry to grow and to be profitable because of the benefits of that category.”
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Yet Genetski acknowledged that the geographic footprint of legal sports betting is much larger than that of iGaming. While 37 states have legalized event wagering, only New Jersey, Connecticut, Delaware, Michigan, Pennsylvania, and West Virginia have authorized a full slate of online casino games. Several iGaming-related bills have been introduced in states this year, but so far, none have taken the plunge.
The Canadian province of Ontario also has a competitive iGaming market with both online sports betting and casino gaming. In one year of operation, that market saw more than $35.5 billion wagered and $1.4 billion in total gaming revenue generated across more than 70 sites.
Genetski said some states may remain cool to the idea, yet others, such as those that already regulate online sports betting and that have land-based casinos, could start to give serious consideration to iGaming. For instance, New York is one market that is being closely watched.
Some factors are making it tough to get iGaming legislation approved right now. Lawmakers only have so much time in a legislative session to pass bills, and states are also not yet feeling the kind of financial crunch that could prompt them to look for additional revenue sources, such as iGaming. When that changes, so, too, could the mood in state legislatures.
"I think we're getting to the point now where you're going to start to see more of an expansion of iGaming," Genetski said. “I think you'll see those states start to come around.”
