Could America see an expansion in online gaming as a result of the coronavirus shutdowns? By Howard Stutz, Executive Editor, CDC Gaming Reports March 24, 2020 at 10:27 pm Once the coronavirus pandemic has subsided and the gaming industry begins what portends to be a slow recovery, we may finally start to hear serious discussions surrounding legalized online wagering. According to the American Gaming Association, 973 casinos – commercial and tribal – are closed in some 40 states and are expected to stay that way well into April. Two states with legal online casinos have experienced a jump in business. “We are seeing about four to five times as many new casino customers signing up compared to what we would expect considering seasonality right now,” Rush Street Interactive COO Mattias Stetz told PennBets. The company operates the PlaySugarHouse and BetRivers online casinos in Pennsylvania. In a report Monday, Eilers & Krejcik Gaming said New Jersey’s “bellwether” online casino market is also seeing a spike in customer acquisition and revenue. “One of the major coronavirus storylines … will be whether the outbreak catalyzes a wave of online casino expansion,” Eilers & Krejcik principal Chris Grove wrote in the report. “Our view is that online casinos could become politically salable in a post-coronavirus setting, especially if a recession takes hold.” Six states have legalized online casino gaming where access is restricted to players gambling within the individual state lines. Pennsylvania, which only launched last year, and New Jersey are the largest markets due primarily to large population figures. Delaware is a small state, while Michigan and West Virginia have yet to launch. Which brings us to Nevada. The state launched online gaming in 2013, but it currently is a poker-only market. At its height, Nevada had three poker websites. But Nevada has a small population, and there was little interest from tourists wanting to gamble online. Ultimately, two of the sites closed. In 2015, Nevada and Delaware launched a multi-state poker network in order to share players and increase game liquidity. New Jersey joined a few years later. Seven states had legislation pending before the coronavirus outbreak caused lawmakers to suspend sessions indefinitely. Grove suggested the prolonged casino shutdown could re-fire an online gaming push. “Casinos are major economic engines for a broad array of states, and that engine is now fully stalled,” Grove said in an email. “Anything that can help to bring it back to life has to be seriously considered, especially given the deep uncertainty about both when casinos will reopen and when consumers will decide to return.” Grove suggested Nevada might take the lead in a nationwide Internet gaming expansion. Through laws currently on the books, state gaming regulators can make changes that would allow operators to add casino games like slots, blackjack, and roulette, to poker-only sites. “I believe Nevada will take a serious look at expanding online gambling, especially given the apparent lack of need for enabling legislation,” Grove said. There might be some pushback, however, from some casino operators, notably Las Vegas Sands Corp. Billionaire Sheldon Adelson, the company’s chairman, CEO and majority owner, has long opposed Internet gaming, vowing to spend millions to kill any legislation in favor of the activity. Adelson was also behind the Department of Justice effort last year to throw out the 2011 reinterpretation of the Federal Wire Act, which allowed Internet gaming to expand. That effort is tied up in federal litigation. “It’s not clear to me that the internal dynamics of support and opposition have been changed enough by recent events to provide a viable path for legal online casinos in Nevada,” Grove said. Caesars Entertainment’s World Series of Poker site is currently Nevada’s only online poker location. WSOP.com is also live in Delaware, Pennsylvania, and New Jersey, along with other Caesars and Harrah’s branded sites. In Nevada, WSOP.com typically draws big numbers between the end of May and the middle of July, when the World Series of Poker’s annual event is held at the Rio. The website hosts satellite events with prizes that include winning seats in live tournament events, including the $10,000 buy-in No-Limit Hold’em World Championship. Tournament spokesman Seth Palansky said WSOP.com spikes to “double or triple” the number of users in those months than it sees during the rest of the year. However, with Caesars’ eight Strip resorts closed since last week, he said WSOP.com has averaged 46% more active users than a typical day. Online poker proponents believe the model could be operated similarly to online sports betting. The sites take a one-time fee out of each pot, much like the “vigorish or vig” a sportsbook takes on each wager. The rest then goes back to the player. An argument could be made about whether or not consumers should be gambling online at all during a time when the economy is facing a downturn and employees in businesses around the U.S. are seeing pay reductions, layoffs, and furloughs. Still, proponents believe that with various forms of gambling legal in 48 states, the markets could recoup lost tax revenues during the coronavirus-forced shutdowns. “The experience of states such as New Jersey and Pennsylvania that have already authorized online gambling makes it clear that governments can generate significant revenue from license fees and taxes, especially when you’re allowing both sports betting and casino games,” he said. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.