Cannibalization of retail casino revenue remains one of the biggest sticking points in discussions about legalizing online casinos.
Ohio Rep. Brian Stewart said his HB 298 is built around that concern restricting online casino licenses to existing casino and racino operators and mandating that promotional credits can only be used at the retail locations.
Stewart made the case for that framework on Sept. 18 during a panel at iDEA Growth‘s Power Lunch Summit webinar, “State Lawmakers on the Front Lines of the iGaming Debate,” alongside Virginia state Sen. Jeremy McPike and Massachusetts state Rep. David Muradian, moderated by iDEA state advocacy director John Pappas.
McPike and Muradian brought their own perspectives to the panel, as Virginia and Massachusetts lawmakers wrestle with similar online casino legalization pushes and the same cannibalization concerns from their states’ retail casino operators.
Giving retail casinos a piece of the pie
Stewart made a point of bringing land-based casinos into the process early. Before introducing the bill in May 2025, Stewart made sure every existing gaming interest was comfortable.
“If I introduce a bill and it immediately becomes this turf fight amongst all of the different gaming interests, it’s dead on day one,” Stewart explained. “Because even if you guys all agree, I have to drag a lot of legislators along with the idea to begin with.”
Stewart chose to include the state’s four casinos and seven racinos for 11 total online licenses.
In addition, Stewart’s bill would ban promotional credits and online bonuses that are popular on sports betting platforms. Instead, he’s tying those types of promos back into the retail industry.
“FanDuel and DraftKings came in and they have a national reach and a lot more money,” Stewart said. “And what we saw was FanDuel and DraftKings gobbled up a lot of the sports betting [promotional] market and the locals didn’t have much.”
Stewart came up with a tactic that would drive visitation and revenue back to land-based properties. For example:
“So instead of saying do iGaming with BetMGM and get $500 in online bonus bets, it would be bet with BetMGM and you get a free dinner at the Cleveland casino or free play in credits at the Cincinnati racino,” Stewart explained.
Cannibalization topic in other markets
New Jersey is a top gambling market in the U.S. with a strong retail industry in Atlantic City, and has offered iGaming since 2013.
In August, Atlantic City casinos produced $294.9 million in revenue. Through eight months, land-based properties have recorded $2.01 billion in revenue, a 1.8% increase from this point last year.
Pappas said Atlantic City casinos are on pace for their best revenue numbers in a decade all while iGaming, which has nearly 30 operators, is shattering year-over-year records.
“Here, we have a very clear example of a market where the land-based industry and the online industry is growing together,” Pappas said.
McPike is looking at the maturity of the gaming market as a whole in Virginia, where iGaming legislation came close to passing earlier this year. The retail industry added a new casino in January with Live! Casino Virginia. The casino is operated by Cordish Cos., which is also behind the National Association Against iGaming.
Other issues in online casino debate
There are only seven states with legal iGaming, which points to the challenges of passing legislation. Online sports betting, on the other hand, is legal in nearly 40 states and Washington D.C.
Cannibalization remains one major hurdle, as already discussed. Another is the number of lawmakers opposed to gaming altogether, like Texas Sen. Bob Hall, who is pushing legislation to block Kalshi from operating in Texas.
Stewart, 44, also said that he gets no pushback on gaming from legislators his age or younger. For anyone older, gaming legislation is “a much harder sell.”
McPike said that the sell is harder because people have access to gaming whenever they want with iGaming. The challenge is figuring out how to bring skeptical lawmakers on board.
“How do you connect the dots around those conversations,” McPike explained. “It deals with raising the bar around protections, raising the bar around limits, raising the bar around what are you going to bring to the table that says we’re doing these other things that go way above and beyond.”
Muradian stressed honesty and telling “both sides of the story.”
