Gaming executives Thursday called U.S. igaming an “undiscovered gem” and a “once-in-a-generation opportunity” for the industry whose growth has been greatly accelerated by the COVID-19 shutdowns and lockdowns.
Interactive-casino and gaming executives were bullish on the future of igaming as part of a panel discussion Thursday at the SBC Digital North America conference.
“In the U.S., we’re seeing record growth in the igaming market, especially with Michigan and West Virginia going online in the past year,” said Cathryn Lai, a senior vice president with SG Digital and the panel’s moderator.
The American Gaming Association reported that April igaming revenue in the U.S. was $299.9 million, as it continues to blow past pre-pandemic levels. The sector started to grow when casinos were shuttered in the spring 2020 due to COVID-19.
“It’s unbelievable to think that two years ago, we were a little business with 12 people in this office, and now we’re 600-plus and one of the biggest regulated online gaming businesses in the world for a market that’s just really getting going,” said BetMGM CEO Adam Greenblatt.
Five states — New Jersey, Delaware, West Virginia, Michigan, and Pennsylvania — offer igaming and more states are expected to go in that direction in the future to generate revenue; it’s a lesson learned from the closures during the COVID-19 pandemic. By comparison, more than 30 states have legalized sports betting (not all have implemented it) some three years after the U.S. Supreme Court struck down a federal ban on single-game wagering outside of Nevada.
“For me, the igaming element of what’s happening here in the U.S. is really the undiscovered gem,” Greenblatt said. “For all of the human tragedy, COVID has been amazing for this business, a real accelerant. People had more time and fewer options and those fortunate enough to keep their jobs have had more disposable income. We were the beneficiaries of that. It will be interesting to see what happens when we come out of the COVID period.”
Richard Schwartz, president of Rush Street Gaming, called what’s happening today with igaming “a once-in-a-generation opportunity” in the U.S. He said Rush Street was part of the recent launches in West Virginia and Michigan and added that a casino is going online later this year in Ontario, Canada.
Jon Kaplowitz, the head of Penn Interactive, called what’s happening in the igaming space “a whirlwind.” He started at Penn Interactive two years ago when it employed 80 people. They’re approaching 400 today, he said.
“We’re going to be in eight to nine states by football season and 11 to 12 states by the end of the year,” Kaplowitz said. “It’s been a crazy ride. We’re in a unique position, because we have two specific brand audiences. We have the mychoice brand (Penn National), which has 20 million card-carrying loyalty members across our regional footprint. And we have our Barstool audience, which is a 100 million-strong social media audience (after Penn National acquired Barstool Sports). They are highly complementary. I’m sitting here in Pennsylvania right now, we have an online casino dedicated to each one of those audiences, and they don’t cannibalize each other. We’re going to see some of the positive effects of that in our market-share numbers once they come out next week in Pennsylvania.”
While the operators Thursday pleaded for more states to legalize igaming, they said they’re focusing on improvements to products, in addition to acquiring more players in states where they operate.
“Unlike sports betting where the entertainment occurs outside the app, but on the field and the court, we’re manufacturing fun in the app itself,” Greenblatt said. “Innovation will pick up in the industry. Most companies are just focusing on getting business started in their market. Once that is up and distributed, we can focus more on the fun things, which are creating unique experiences for the player.”
Kaplowitz said product development is important for the future of igaming.
In May, Penn National announced it had established Penn National Game Studios as an in-house development team focused on creating icasino content for its customers. It has also acquired game-design company HitPoint Studios Inc.
“We’re trying to create amazing games that talk to older slot-heavy players and younger ones of a more sports-betting Barstool demographic,” Kaplowitz said. “There’s so much opportunity to get both of those players, and we’re really excited about that.”
