Louisiana sets the stage for more work on online casinos at a later date

Louisiana Shuts Down Online Gambling Bill For Now, Advances Sports Betting

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Louisiana lawmakers took a pass on an online gambling bill while they explore the matter in more detail.

On Tuesday, the Senate Committee on Judiciary considered a handful of proposals related to gambling expansion in the Bayou State. It advanced one bill related to sports betting, but it deferred another centered around online casinos.

After considering testimony on both sides of the issue, the committee determined that more work is needed to please all parties.

Early days for Louisiana iGaming

The iGaming bill was introduced by Sen. Danny Martiny, who represents a district just outside New Orleans. Martiny authored the Louisiana sports betting bill, too, and he indicated that both efforts are driven by concern for the state’s finances.

“This isn’t my life’s passion,” he told the committee. “I’m just telling you we’re broke, and nobody else has any ideas of how we can fix it.”

These conversations were the state’s very first on the topic of iGaming, so lawmakers are still getting educated about the industry. That extends to regulators, too.

“We’re just going to have to learn,” said Jeff Traylor of the Gaming Enforcement Division. “See how everyone else does it and figure it out. I mean, put it together the best we can.”

Both the sports betting and online gambling bills would require a voter referendum to become law.

Opposition from video gaming operators

The Louisiana Video Gaming Association provided the primary opposition for S 322.

The group operates a huge network of video poker machines installed in bars, restaurants, gas stations and truck stops across the state. Taxed an admittedly burdensome rate, these machines generate more than $320 million in annual revenue for the state.

“This bill, internet gaming, we think will devastate the industry,” said chairman Alton Ashy, “because people are just going to stay home.”

Indeed, if online gambling is made available in parishes without casinos, there might be less incentive to play video poker in a gas station. However, the two target markets — for video gaming terminals and online casinos — are probably pretty different at the same time. More on that below.

But given the amount of VGT revenue directed to the state, it does seem prudent to take a closer look at the interplay between the terminals and online gambling.

Lawmakers also cited a desire to keep jobs in the state and concerns about potential cannibalization of casino revenue as additional reasons to hold off. Even Martiny conceded that the proposal was unfinished, mainly positioned as a conversation starter.

Sen. Gary Smith, who chairs the committee, recommended that Martiny form a task force to dig deeper on the issue.

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Golden Nugget offers NJ intel

Much of the hearing was occupied by testimony from Thomas Winter, who oversees online gaming for Golden Nugget.

The group has a strong stake in the Lousiana iGaming conversation. Among its nationwide portfolio, Golden Nugget operates a land-based casino in St. Charles. It has another in New Jersey, too, where it operates in tandem with an online casino product.

Under Winter’s guidance, Golden Nugget online casino has taken control of the market in NJ. It’s responsible for nearly a third of total NJ iGaming revenue, a $245 million industry in 2017. The group’s online operations directly created 100 new jobs, too, many within NJ.

Being a casino state, Louisiana lawmakers are justified in their desire to protect land-based gambling. Data reveals the cannibalization argument to be unfounded, though, and Winter offered his own company’s results as a case study.

Last year, Golden Nugget’s NJ license generated just shy of $70 million in online casino revenue spread across three brands. Meanwhile, brick-and-mortar casino revenue increased by 14.4 percent year over year, operating within a struggling local economy.

The two products simply attract two different segments of the population. According to Winter, the average age of a Golden Nugget gambler is 58 years old, while the average online gambler is 42. What’s more, less than ten percent of the brand’s online casino customers come from the land-based database.

It’s likely no coincidence that the financial rebound of Atlantic City coincides with the maturation of the online gambling industry. But Louisiana lawmakers require some more convincing before they’re willing to adopt it within their own borders, though.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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