Despite a flurry of online casino legalization efforts this year across the US, most bills made little progress.
The emergence of the National Association Against iGaming was at least partially responsible for the lack of movement in online casino legislation across the nation.
LSR caught up with Mark Stewart, executive VP at Cordish Companies and an NAAi board member, to check in on the group’s efforts.
LSR: Cordish Companies has been against online casino expansion for a long time. What was the reason to start the coalition?
Stewart: What we found through talking amongst the industry, and running into different members in the legislative process in different states, were more and more companies that had a similar mindset of concern about the expansion.
What it does to the brick-and-mortar business, but also to the industry and reputation overall. Just through talking with each other, we started to find more and more companies that were aligned, and David Cordish had the idea of why not form a national association.
LSR: The expansion efforts saw little movement this year. What are the arguments resonating with legislators?
Stewart: There are a number of arguments that resonate. Jobs are a very big one, and the fact that in each of the [online casino] states, there have been substantial reductions in the casino workforce, and people losing jobs to the internet is not something very popular and is real.
I think everybody understands that it’s a different product when it’s offered on the phone. It’s really resonated that the delivery device is part of the problem. Our phones are designed to come back to them time and time again throughout the day. Americans check their phone every five minutes, and then when you take something designed to do that and add a gambling product, the 24/7 access is not something people think is great.
And as brick-and-mortar operators, we constantly talk about friction-based gaming. You have to get out of the house, get to the in-person location, and get out money because you have to use cash. You’re gambling and interacting with humans, not in isolation. Casino employees are trained to see things. All of these friction points allow the player to think twice, and all of that is lost when gambling on your phone alone in a bedroom or car, or on a couch. It’s a very different product.
LSR: Has anything about Cordish’s position on iGaming changed?
Stewart: There is not a change in our view, but a change in the collective view, and there is a shift in momentum. In the beginning, 2017, 2018, when a lot of the bills were bandied about for the few states that have it, there was this sense that people bought into the omnichannel argument, that it’s additive or hitting a different demographic. As time progressed and we saw the impacts of online gambling, we see that hasn’t panned out, and we see the impacts are a lot worse than anybody anticipated.
We probably should have been studying internationally, but everybody was pretty much looking here in the US, and caught up in it is online, oh great. Now we see the university studies about the disproportionately impactful effects on low-income demographics and the increases in family disintegration, partner violence, and all kinds of issues. It’s increased welfare and criminal justice costs to the states.
At one point, it was viewed as inevitable because they shop online and do everything online. But more and more with the data, it doesn’t have to be inevitable.
LSR: Is the association solely against online casino, or does it include online sports betting?
Stewart: Our association is online casino. That’s in part because we certainly recognize the overlap in some of the harms and data. Particularly, online sportsbooks are not your father’s sportsbooks. The in-game betting is so rapid that it almost mimics a slot machine. There’s definitely some overlap in the harms and concerns.
But as an association, because [online sports betting] is legal in so many states, and it’s one thing to stop the expansion, but it’s another to repeal, we’ve focused on the expansion of online casino. It’s something we’re always looking at, and members of our association who support portions of the Safe Bet Act, and various measures that have been introduced to try to mitigate some of the damage of sports betting.
LSR: A common argument is to bring something people are doing illegally into the light and tax it. How does the organization feel about that argument?
Stewart: We don’t want to compete with the black market; we want to stop that. Enforcement and increasing enforcement tools is what should be the focus. And not only on the criminal side, getting injunctions, authorizing state government to preclude the payment processors from servicing illegal sites, focus on the platform providers, the hosting providers, the payments processors, you don’t have to just focus on the overseas illegal operators. Enforcement is the first thing. There are a lot of things people do that we don’t legalize.
The second, and this is evident across markets, cannabis, and gambling, and documented in multiple studies, is that legalizing online gambling does nothing to shrink the market. It grows the illegal market. Data from Pennsylvania and New Jersey, 20-30% of those who gamble legally are still gambling in the illegal market.
There is no evidence that legalization does anything to shrink it. Last year, Michigan and Pennsylvania issued 55 C&Ds to illegal operators. That’s five to six years after the legal, regulated markets launched. If it were such an effective tool to stop that, they wouldn’t be doing that.
We think the opposite is true, and desensitization and normalization have opened the door for the illegal operators to flourish. There are so many TV ads online in states that have legal online gambling. They’re oversaturated, and the public is confused. They see a licensed op and a gray or illegal sweeps operator, they don’t know the difference. They do know you can advertise, so they must be OK.
LSR: How has the online casino market affected Cordish in Pennsylvania?
Stewart: There are two aspects to this. First is the amount of brick-and-mortar that are down in states that have iGaming. If you look at the casinos that were opened in 2019 and look at 2024, they’re down 14%. And then you have to add to that the growth that’s enjoyed by casinos that don’t have iGaming.
In that same time period, brick and mortar in non-iGaming states grew at 13%. So you’re talking about a 27-28% cannibalization rate that was open in 2019 and 2024. Is every single percentage point tied to iGaming? That’s for statisticians to debate, but a very large part is.
LSR: What are the plans in states where it might be legalized?
Stewart: Each of our members has their own positions on it. Many simply will not be in the market and will not participate. We make that decision state-by-state. Right now, we have a license in Pennsylvania because we felt it was necessary to protect our $950 million in investments and 2,000 team members. But it’s constantly under reevaluation, and as I’ve said to multiple legislatures now, we’d call for repeal.
