Gambling

JACK Entertainment Exec Says Ohio iGaming Would Hurt Casinos

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Posted on: April 18, 2024, 12:55h. 

Last updated on: April 17, 2024, 03:56h.

A top executive at JACK Entertainment, the Ohio-based gaming operator that owns two gaming properties in the Cleveland metropolitan area, says online casinos would push brick-and-mortar casinos into bankruptcy not unlike online shopping did with retail malls.

JACK Entertainment Ohio iGaming casino
Executives with JACK Entertainment, which owns and runs JACK Cleveland Casino, are opposed to Ohio lawmakers considering iGaming authorization. Company officials say online casino gambling would have a similar result on brick-and-mortar casinos as the emergence of online shopping did on retail shopping. (Image: TripAdvisor)

Daniel Reinhard, senior vice president of government affairs for Cleveland-headquartered JACK, testified last week before the Study Commission on the Future of Gaming in Ohio, a legislative committee formed last year. Reinhard said the JACK Cleveland Casino and JACK Thistledown Racino operator strongly opposes efforts to legalize online slot machines and interactive table games in the Buckeye State.

“Just like online retail has decimated local retail, iGaming will do the same under any logical scenario,” Reinhard testified. “iGaming will damage Ohio businesses and cost Ohio jobs leading to diminished capital investment and degradation of Ohio’s existing tax base.”

Ohio’s current commercial gaming industry allows players to gamble on live dealer table games at four land-based casinos in Cincinnati, Cleveland, Columbus, and Toledo. Slot machines are offered at the four casinos and seven racinos, the latter of which cannot facilitate table games.

The 11-person Study Commission is due to make gaming expansion recommendations, if any, to the Ohio Legislature by June 20, 2024.

iGaming Opinions 

Reinhard told the Study Commission that there’s only so many discretionary spending dollars for gambling.

More gambling, paired with the convenience of gambling from home from a smartphone, would put the physical gaming floors at a competitive disadvantage for those dollars. JACK employs 1,400 people, jobs that Reinhard argued would be at risk should iGaming be implemented.

Every market has limits on discretionary dollars. Gaming is no different. No matter what study is presented, online consumption eats away and eventually devours retail business,” the JACK exec added.

Other industry stakeholders in Ohio disagreed. The Study Commission heard from representatives from MGM Resorts and Penn Entertainment who lent their support for iGaming.

MGM runs MGM Northfield Park, a racino. Penn operates two casinos — Hollywood Casino Toledo and Hollywood Casino Columbus — and two racinos — Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course.

iGaming supporters have cited recent research suggesting that online casinos complement brick-and-mortar play.

Penn Entertainment supports the legalization of internet gaming as a catalyst for growth,” testified Jeff Morris, Penn’s vice president of public affairs and government relations. “It can be complementary to existing brick-and-mortar businesses and drive gaming and associated tax revenue.”

iGaming vs. Retail

Only five states last year had both commercial brick-and-mortar casinos and online gambling with slots and table games — Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia.

Two of those states, Michigan and West Virginia, saw in-person gross gaming revenue (GGR) decline year-over-year in 2023. iGaming revenue, meanwhile, soared in each state.

In Michigan, commercial retail casino win declined by 3% to $1.23 billion while iGaming win climbed over 18% to $1.9 billion. In the Mountaineer State, the state’s physical casinos saw win decline by about 1% while online revenue soared 20%.  

In the states where brick-and-mortar casinos managed to increase GGR, their gains lagged far behind iGaming’s gains.

In New Jersey, for example, Atlantic City casino revenue last year totaled $2.8 billion, a 2.2% increase from 2022. New Jersey’s online casinos won over $1.66 billion, a nearly 22% rise.

In Pennsylvania, traditional casino gambling generated GGR of approximately $3.43 billion, a 1.6% year-over-year gain. iGaming revenue rose nearly 28% to $1.74 billion.

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