American Wars: Land-based Versus Online Casinos in the USA

The battle between online and land-based casinos in the United States is still going strong.

There’s a huge battle waging in the United States, and this time there are no guns or soldiers out there on the field, but ink and paper inside the courtrooms and governmental agencies. The battle is between land-based gambling establishments and online casinos in the United States.

After New Jersey, Nevada, and Delaware changed American gambling laws in order to allow online casinos and other internet gambling establishments in their states, there have been mixed opinions from all sides. Some states are jealous of the pioneers and are taking steps to jump on the bandwagon, while the online gambling opponents’ camp has grown and now includes land-based tycoon Sheldon Adelson and his anti-online gambling coalition.

Online gambling as source of income

The battle between land-based and online casinos still wages in the USA

• Three states allow online casinos in the United States

• There are large camps of opponents and supporters of online gambling

• Fewer costs and additional tax revenues speak in favor of online gambling legalization

It’s no surprise that some US state governments are struggling to attract more money to their coffers. The legalization of online casinos and online sportsbooks in the United States is widely regarded as one of possible sources of income for local budgets. Opening up the market will boost state tax revenues and stimulate the local economies.

Although, the initial results in the three states that do allow online gambling have been far from projections, with online gambling enterprises struggling to reach the estimate profit margins. Everyone understands that we’re still in the beginning and the profits as well as tax dollars can still take a turn for the better.

After New Jersey approved the bill allowing internet gambling, Governor Chris Christie projected the move to bring in around $160 million in tax revenues in the first year. Of course we now know that this number was too optimistic, judging by the first 6 months. Fitch Ratings Services estimates the actual results to be around 45% lower than expected.

American gamblers still prefer land-based destinations over online gambling offerings, but that still might change given the rapid expansion of internet gambling and especially growing mobile gambling sector. On the other hand there has been a string of land-based casinos closing, including establishments in Atlantic City and Mississippi.

Proponents of online gambling say that its legalization will not directly eat into the land-based casino tax revenues, but it might really come to the point when American gambling companies will have to choose whether to focus on land-based or online efforts in order to stay profitable.

Online casino business

Legalization of online gambling in the United States is not all about profits and tax revenues, there are other benefits as well. Online gambling establishments require far smaller investments and less operational expenses, meaning they should bring in larger returns than land-based competitors.

Additionally, online casinos offer one crucial benefit – gamblers don’t need to leave the comfort of their homes in order to play. Such convenience factor allows gamblers to do something else they want and in the meantime pursue winning money at online casinos. They also offer a chance to go from one game to another in a matter of seconds.

However, such flexibility comes with a price for online casinos. Experienced casino managers know that having as little distractions as possible makes gamblers play more, something very hard to achieve in case of online casinos. Frustrated gamers can exit a casino at a click of a button, whereas at land-based establishments there’s a number of ways to still keep a gamer inside the casino regardless if they are winning or losing.

Land-based casino business

Sure online casinos are highly convenient for players not willing to leave their homes, but land-based casino benefits are much clearer when it comes to states’ coffers. Take a look at Mississippi, where 29 casinos employ around 23,000 people including slot technicians, dealers, and law enforcement personnel. Naturally, such large workforce is not needed for an online casino, taking us right to the unemployment issue.

Having said all that, the recent statistics for land-based casinos are not very optimistic. Their revenues have been dropping steadily in recent years, and naturally this contributed largely to multiple establishments across the United States shutting their doors.

Northeast of the country experienced oversaturation of gambling establishments resulting in ordinary consumers looking for totally different ways to gamble their money than open casino tables. Besides gambling offerings, non-gaming entertainment has become key in attracting new and retaining old customers.

Closure of old casinos and in some cases restructuring is generally regarded as a positive thing now, when the future of land-based casinos is concerned. Recently awarded licenses to erect more casinos close to New York City can only speak in favor of land-based casino business.

All in all, there is a long list of pros and cons for both land-based and online casinos in the USA. And it’s also possible for a single company to operate both types of gambling establishments, a path many operators choose. However, many industry experts suggest that in order to really concentrate on making money, gambling operators need to focus on one type of gambling establishment.