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Indiana Gaming Study Shows Impressive iGaming Prospects

Written by Jennifer Newell
Last updated on
Indiana

Indiana has not been at the forefront of internet gaming in the United States. In fact, Indiana mostly left the issue on the sidelines as Nevada legalized online poker nearly a decade ago, Delaware and New Jersey allowed online poker and casino games around the same time, and Pennsylvania and Michigan, Connecticut and West Virginia boarded the igaming train since then.

That’s not to say Indiana has been ignoring all gambling expansion. To add to its Native American and riverboat casinos, Indiana did legalize retail and online sports betting and launch the new wagering options in late 2019.

In 2021, Indiana lawmakers considered a Senate and House bill to authorize casino operators to obtain licenses for interactive gaming. However, both bills died without any movement through the legislature. In 2022, a House bill started early thanks to State Representatives Doug Gutwein and Ethan Manning, and a Senate bill sate alongside it, per State Senators Jon Ford, Chris Garten, and Ronald Grooms. They introduced their bill on January 11, but they had to advance it out of the Public Policy Committee within just a few weeks. That didn’t happen.

Senator Ford knew that they needed financial incentives to garner support. There was a Global Mark Advisors analysis commissioned by the Casino Association of Indiana and iDEA Growth, both advocates of igaming. That study provided promising numbers:

-2023 projected annual revenue:  $420M ($75M in state taxes)

-2025 projected annual revenue:  $575M ($97M in state taxes)

-2027 projected annual revenue:  $611M ($108M in state taxes)

While that study didn’t propel the 2022 bill forward, those lawmakers had another study in the works.

?ref_src=twsrc%5Etfw”>August 28, 2022

Indiana Gaming Commission

Since igaming advocates commissioned the aforementioned study, some could be skeptical that it had a slant. To be fair, the Indiana Gaming Commission took over and commissioned a different study, a market and policy analysis from Spectrum Gaming Group.

The date on that study was July 2022, but the public didn’t see it until months later.

In an extremely detailed and comprehensive report, Spectrum outlined the many benefits of legalizing state-licensed online gaming, including casinos and poker.

Potential Revenue

According to the latest study, the best way to estimate igaming revenue is to look at the historic revenue of other states that are in the igaming industry. They used three methods to come up with projections.

First, they used the Spend per Adult Method, focusing on the last three years of igaming habits for adults in igaming states.

–Year 1 estimated igaming win:  $277M

–Year 2:  $604M

–Year 3:  $836M

Second, they estimated per the Gross State Product Method. They used historical spend in existing markets as a percentage of gross state product, which incorporates consumer spending increases with income increases.

–Year 1 estimated igaming GGR:  $563.9M

–Year 2:  $690.3M

–Year 3:  $821.4M

Finally, Spectrum used the Disposable Personal Income Method, based on the experiences of other states.

–Year 1 estimated igaming revenue:  $566M

–Year 2:  $694M

–Year 3:  $831M

Taking the average of all three methods and summing up the three-year projected revenue, the report came up with nearly $2B ($1,962,000).

Demographics

The Indiana igaming report also presented some data about the demographics of players in the US igaming market, limited as the data is. One anonymous igaming operator provided data to provide some idea of igaming players.

The age groups  broke down the percentage of players and the percentage of gross gaming revenue to which they contribute.

-Ages 21-39:  47.1% of players / 28.7% of GGR

-Ages 40-54:  34.6% of players / 44% of GGR

-Ages 55+:  18.4% of players; 27.4% of GGR

The gender differences are not as varied as they are in land-based casinos.

-Male:  53.6% of players / 42.7% of GGR

-Female:  43.2% of players / 51.1% of GGR

-Other:  3.2% of players / 6.2% of GGR

Cannibalization Concerns

One of the biggest concerns of lawmakers and people in the land-based gambling industry is possible cannibalization, which is the fear that online gambling options will take business away from brick-and-mortar establishments. The fallacy is that players would stay home to gamble if they could, and this would hurt the casinos.

Quite the contrary, though, is the truth. Other states have shown that online gaming options only increase overall growth potential for casinos.

Spectrum took performances in other states from 2019 through 2021 and averaged the revenue changes.

–Casino and video lottery terminal GGR:  down $290M or 3.3%

–iGaming GGR:  up $3.018M or 580.6%

–Total gaming GGR:  up $2.728M or 29.4%

“Based on results from the six igaming states,” the report read, “Spectrum does not expect igaming to negatively impact Indiana casino revenues.”

?ref_src=twsrc%5Etfw”>September 29, 2022

 

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