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Lucrative but controversial: The rise of internet casino betting in the U.S.

By Jake Beardslee · November 24, 2023

In brief…

  • Online gambling has generated nearly $7B in revenue in NJ and $16.3B across all states offering it
  • But it remains limited to only 6 states currently and faces skepticism about wider adoption
  • NJ is held up as a model case study, making the most money while benefiting casinos
  • Supporters see it providing lucrative tax revenue without cannibalizing in-person gambling
While online gambling has proven highly lucrative for casinos and state tax revenue in the limited states allowing it so far, broader expansion faces challenges including skepticism that it could hurt brick-and-mortar gambling revenue and competition from daily fantasy sports sites.  Pixabay/CC0

Internet gambling has been a boon for New Jersey and the handful of other states that offer it, generating nearly $7 billion in revenue for casinos and affiliates over the past decade in the Garden State alone, according to the Associated Press. However, it remains limited to only six states currently.

“Online casino has always been a tough sell,” said Chris Krafcik of Eilers & Krejcik gambling analytics firm, who predicted that “only a very small number of states” will adopt online casinos by 2027 due to factors like competition from daily fantasy sports giants and perceptions it is more hardcore than sports betting, AP reported.

But supporters say online casinos provide lucrative tax revenue without hurting in-person gambling revenue, citing New Jersey as “‘exhibit A’ for its success,” per Howard Glaser of Light & Wonder gaming company, according to AP. Elaine Vallaster of New Jersey echoed this, saying internet slots site “a lot of things to do there” and has let her meet new friends.

Collectively, legal online gambling has made $16.3 billion since launching in various states, says the American Gaming Association. New Jersey leads with $6.91 billion since 2013, while Pennsylvania has made the most in tax revenue at $1.83 billion. The added revenue helped Atlantic City casinos endure 2020 pandemic closures when internet gambling “was just about the only money they had coming in,” Stockton University’s Jane Bokunewicz told AP.