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The CEO of BetMGM, the US market leader in online casino gambling, said today that the “winds are turning” in favor of iGaming growth for two reasons.
First, its historical foes — established land-based casinos — have become its allies and partners. Those business owners are now coming to realize that online casino games don’t cannibalize land-based revenue. Instead, online operators enhance retail casinos’ profitability, says BetMGM CEO Adam Greenblatt.
Second, North American lawmakers are noticing the success of online casinos in Michigan, New Jersey and Pennsylvania.
During Wednesday’s BetMGM call to provide an “update on performance and outlook for 2022,” Greenblatt said:
“The winds are turning. And to me, I think that’s the biggest takeaway.”
Greenblatt made a prediction about what will happen as online casino operators look to expand into new jurisdictions in the coming years:
“We will see support from incumbent retail casinos.”
Granted, BetMGM may have unique insight into legacy retail casino operators’ points of view.
After all, BetMGM is a partnership between an established retail casino brand, MGM Resorts International, and an online gambling company, Entain.
However, Greenblatt spoke generally today about historic opposition to online casino legalization.
“The long-term opposition […] has come from incumbent, land-based casino operations,” he said, adding that it’s “going away” as stakeholders realize that both can thrive in today’s market.
He highlighted how BetMGM’s success helped MGM’s bottom line.
BetMGM announced today that it “expects to deliver net revenue from operations” of more than $1.3 billion during 2022.
As it is, BetMGM remains the market leader in US online gambling, with a 30% market share in its four iGaming states during the three months leading up to November 2021.
Add that up and BetMGM Casino, as well as its online poker and sportsbook brands, generated $850 million in net revenue during 2021.
It helps that adding in those poker and sportsbook products brings BetMGM to an overall market position of second place, with 24% of market share. However, speaking about just the iGaming products, Greenblatt said “all of our gaming states” are successes, pleasant surprises and “a delight to see.”
He said Michigan exemplifies “BetMGM’s strength and leadership” and that the company “[hasn’t] seen a plateauing” of organic demand in live states. Plus, BetMGM will add more online casino products in more jurisdictions as those areas legalize the option.
Online casinos in Michigan, New Jersey and Pennsylvania combined to generate more than $3 billion in gross gaming revenue during 2021.
According to BetMGM CFO Gary Deutsch, the company’s Michigan and New Jersey operations are already “contribution positive.”
Meanwhile, BetMGM’s other states are moving toward that territory too. “We will reach profitability in 2023,” Greenblatt declared.
Of course, there’s always the possibility that something could throw off its progress — like a large competitor entering the space.
“Let’s not lose track of reality,” Greenblatt said. “We are not selling toothpaste.”
Surprisingly, Greenblatt mentioned the possibility of Indiana online casino legislation before Illinois or Ontario in his list of the next possible jurisdictions to legalize online gambling.
Ontario was poised to launch a privatized iGaming marketplace at the end of 2021, but the go-live date is now expected later this year.
In US online casino discussions, Illlinois seemed like the most likely candidate to legalize iGaming last year. That effort also stalled. However, 2022 holds promise.
Now, Indiana lawmakers are moving forward with two online casino proposals: HB 1337 and HB 1356. Both measures include an 18% tax rate. Lawmakers in the Hoosier State didn’t immediately return Online Poker Report‘s request for comment.
However, nonprofit iDEA Growth (iDevelopment and Economic Association) sent OPR an overview of Indiana’s possibilities. If one of the bills becomes law, the proposed 18% tax rate on iGaming will generate $500 million in new gaming tax revenue annually, iDEA estimated.
The state previously legalized online sports betting in October 2019.
IDEA’s announcement quoted Matt Bell, executive director for the Casino Association of Indiana:
“iGaming in Indiana will modernize our industry and keep us competitive with our neighboring states that seek to extract Hoosier customers and Hoosier entertainment dollars from our state. […] The iGaming market presents Indiana with an opportunity to expand our current regulated environment in a positive way, without impacting the land-based gaming revenue generated in the state. Just as mobile sports betting has grown the overall revenues for our industry, iGaming will enhance our connection with existing customers and enable us to meet new ones in ways never before possible.”