Digital Gaming Threatens Traditional Casinos During Legislative Debates
In the ongoing 2025 legislative season, the debate surrounding iGaming (online gambling) legalization continues to dominate discussions in numerous state capitals. This contentious issue has pitted traditional gaming operators against tech-driven platforms, with some advocating for the benefits of a regulated online market, while others express concerns about the potential impact on brick-and-mortar gaming and employment.
Economic Impact
States that have legalized iGaming and online sports betting have experienced a significant surge in gambling spending, leading to a corresponding rise in tax revenue. A study reveals a staggering 369% increase in gambling spending, with Massachusetts generating $90.8 million in tax revenue from online sports betting in its first year, accounting for 22% of all non-lottery gaming tax revenue [3]. Illinois, for instance, could generate $450 million to $800 million annually in new tax revenue from iGaming [2].
The growth of online gaming revenue, combining iGaming and sports betting, is on a rapid upward trajectory. In May 2025, online gaming revenue reached $2.21 billion, marking a 28.8% increase [4]. This growth not only adds to the overall commercial gaming sector but also sees traditional casino revenues increase.
Job Creation
While the economic benefits of iGaming legalization are evident, the job creation effects tend to be more modest and vary by state. In Massachusetts, the rollout of online sports betting created a net 118 jobs, but the number of jobs directly attributable to sportsbooks was too small to measure accurately [3]. In some places like New Jersey, the economic impact of companies like BetMGM extends beyond just jobs to broader economic contribution, including tax revenue and support for local economies, but direct employment numbers remain limited [2].
The Balancing Act
The impact of iGaming legalization on jobs and the economy is a complex issue. On one hand, it boosts state economies mainly through tax revenue and consumer spending increases. On the other hand, job creation from iGaming is relatively limited compared to tax revenue gains. Many operators are technology platforms that do not require extensive local hiring.
However, it's essential to note that online gambling does not necessarily cannibalize physical casino revenues; in some cases, it complements them and may help sustain traditional casino businesses [1].
The Stakeholders
Notable gaming companies like MGM Resorts, Caesars Entertainment, Penn Entertainment, Boyd Gaming, and Light & Wonder are largely supportive of expanding iGaming options throughout the US. On the other hand, The Cordish Companies and Churchill Downs Incorporated have lobbied extensively against iGaming in state capitals. The National Association Against iGaming (NAAiG), formed late last year, has been vocal in its opposition, with The Monarch Casino Resort & Spa in Colorado's Black Hawk serving as a founding partner.
Howard Glaser, a top government affairs specialist who works with Light & Wonder, estimates that a majority of high school and college-aged kids are already gambling online through unregulated offshore casino websites and/or controversial "sweepstakes" casino platforms [5]. This underscores the importance of regulated markets to prevent illicit betting and capture economic benefits for public use.
In conclusion, iGaming legalization boosts state economies mainly through tax revenue and consumer spending increases, while expanding jobs but at a more modest scale. States prioritize regulated online markets to prevent illicit betting and capture economic benefits for public use [2][3][4]. Light & Wonder, a Las Vegas gaming giant, concluded that online gaming is a net positive. Each of the aforementioned states has an iGaming bill introduced, but the potential job losses could be significant, with The Innovation Group forecasting nearly 10K jobs could be lost in Illinois and New York by 2029 if iGaming is legalized. Even companies like Cordish, which run online casinos in Pennsylvania but oppose iGaming expansion, acknowledge the economic benefits of a regulated market.
- Light & Wonder, a critical player in the gaming industry, argues that iGaming is a net positive, considering the potential economic benefits it brings.
- The General News and economic reports indicate a surge in gambling spending in states that have legalized iGaming and online sports betting, leading to significant tax revenue increases.
- In the ongoing debate about iGaming legalization, some traditional gaming operators like MGM Resorts and Caesars Entertainment support expanding iGaming options, while companies like The Cordish Companies and Churchill Downs Incorporated have been vocal opponents.
- Despite concerns about potential job losses in the brick-and-mortar gaming sector, the growth of online gaming revenue, including iGaming and sports betting, is on a rapid upward trajectory.
- In the realm of Politics and legislation, numerous iGaming bills have been introduced in various states, reflecting the ongoing contentious issue surrounding online gaming and its impact on the economy, employment, and traditional casinos.
