A new year has arrived, bringing hope that additional states will endorse iGaming, but one industry expert contends that the pace of these approvals will not mirror the trends observed with online sports betting. 

In a recent discussion with Deutsche Bank analyst Carlo Santarelli, Richard Scheutz, who has over four decades of experience in the gaming industry, stated that approvals for online casinos at the state level will not come as quickly as those for sports betting. Scheutz, the CEO of American Bettors’ Voice (ABV), cited possible cannibalization of physical (B&M) casinos as a reason states are hesitant to quickly approve iGaming.

"B&M opposition to iCasino, which was always present, has increased, in the aftermath of both Pennsylvania and Michigan legalizing the product, and thereby giving operators more data from which to support / frame an opinion on the magnitude of B&M cannibalization stemming from the product,” wrote Santarelli.

At present, only seven states — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia — permit online casinos. That contrasts with 38 and Washington, DC, which allow certain types of sports betting. This year, Missouri becomes part of that group, bringing the total to 39. 

Avoid wagering on significant iGaming growth in 2025. 

In a report released earlier this week, Santarelli observed that a surge of state-level approvals for iGaming is improbable this year. 

The analyst indicated that Illinois, Indiana, Maine, Maryland, New York, and Ohio could potentially adopt related legislation, highlighting that Maryland and Ohio have the highest chances of success. The industry and investment sector would probably be somewhat pleased with this result, as it indicates advancement; however, there would still be a degree of letdown if neither Illinois nor New York — the two biggest states in that category — adopt internet casinos. 

Wyoming is another contender for legalizing iGaming this year, but as the smallest state in the nation, it's unlikely to significantly influence wider acceptance. 

Santarelli mentioned that the investment community probably shares the perspective expressed by Scheutz, which suggests that land-based casinos present obstacles for iGaming, and that wider acceptance of this type of betting is unlikely to occur this year. 

California, Texas Observations 

Scheutz and Santarelli also examined the prospects for California and Texas becoming states that permit sports wagering. A few years back, the ABV CEO was one of the first to highlight that the 2022 ballot initiative by commercial operators aimed at legalizing sports betting was doomed, and he turned out to be right since that measure was decisively turned down by voters. 

He informed Santarelli that it seems operators have grasped their lesson and now understand that the sole route to sports betting in California is through, rather than avoiding tribal casino operators. 

“Mr. Schuetz is of the view that the tribes will work through balance of power issues, with the potential for a sharing of proceeds agreement, while the OSB operators primarily serve to provide brand equity and technological and operational expertise,” said Santarelli.

Regarding Texas, Scheutz informed the Deutsche Bank analyst that sports betting could gain traction this year if it is advantageous for the initiative to introduce Las Vegas-style casino resorts in the state. There are favorable conditions for that plan thanks to the substantial resources of Las Vegas Sands (NYSE: LVS) shareholder Dr. Miriam Adelson, but it is yet to be determined if Lt. Gov. Dan Patrick (R) will alter his stance on gaming expansion — a shift that seems improbable at this time. 

For sportsbook operators, Texas would be a more favorable option than California since it would enable a competitive market without the necessity for mandatory provisions for tribal gaming organizations.