SBC News Voice of the Sports Betting Industry
The ‘cannibalisation’ of land-based casino resorts by online portals has been in the headlines recently and fits into broader debates on regulations and how they impact the channelisation of regulated markets, a concern impacting all industry stakeholders…
The recent online-offline casino cannibalisation debate that took place (albeit by proxy) between Deutsche Bank and Eilers & Krejcik (EKG) in the US was an illustration of how important the topic is to discussions around online casino regulation and is just as relevant to French and wider European developments on the issue.
The report was carried out by EKG on behalf of the US online gambling trade body iDEA Growth and surveyed “how the legalization of online casino gambling affects land-based casinos” in the US. It found that online players tended to be younger than their offline counterparts, but operators that have both online and offline offerings “have not observed cannibalization”.
The Before-&-After
Comparing the growth rate of land-based casino before and after Online Casino was introduced, the report found that “in all six states (where online is regulated in the US), land-based casino revenue was positively impacted by the introduction of online casinos”.
In the US, the regulatory set up in the leading online casino states of New Jersey, Michigan or Pennsylvania requires online operators to partner with offline casinos. That system also applies in Europe in countries such as Belgium and Switzerland.
France cant hide from Debate
Looking at Belgium, Philippe Bon, CEO of Casinos de France, the trade body for the land-based sector in the country, told Gaming&Co that there have been disparities in how Belgian land-based casinos have fared since online casino regulation.
Bon said that when the vertical regulated, “land-based casinos’ GGR fell initially, (and) they recovered (the revenue) online. But some also recovered some of that growth because they had clever marketing strategies to attract online customers to their establishments”.
With regard to France however, he added that if online casino became regulated without the land-based tie up, such a trend would not be possible. “Boosting land-based casinos with online (casinos) only works if there is a strong link between online and land-based,” he said.
“This is why we are campaigning for our JADE project, to avoid a disaster for both casinos and (the) territories (the regions in which they are based), and if possible to bring in additional customers, by finally allowing French casinos to enter the digital age,” he added.
The topic will no doubt resurface in France in the coming months as land-based and online stakeholders continue to call for iCasino regulation. Returning to the US and for a different take on the issue, Deutsche Bank was clear in one of its recent industry updates.
Maths Acrobats
In reference to the EKG report, the DB team commented that while some observers “appear to (be) doing mathematical acrobatics to arrive at a certain conclusion, we believe the data speaks for itself”… “While it may not be what some want to hear,” the analysts added, “in one paragraph and one chart, we have shown, for some time, and show here again, that iCasino is in fact having an impact on B&M casinos.”
DB added the “underperformance” of land-based casinos in New Jersey, Philadelphia and Michigan, the three states “that actually matter” as they “generate >90% of 2023 iCasino GGR, is so clear that we struggle to see how, but not necessarily why, one could reach a different conclusion”.
In the past year and relative to 2019, the performance of B&M casinos in iCasino states is +0.6% compared with +11.7% for B&M-only states. The issue also fits into broader debates around whether (poorly-drafted) regulations push players towards illegal operators.
Without doubt it will reappear in France in the coming months and observers will also note issues like the different age groups that online and offline casinos attract. And with PMU joining AFJEL this week, stakeholders will be gearing up for some serious discussions on all these topics.
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This article is published by SBCNews in partnership with Gaming&Co.
