Nevada is home to Las Vegas, which is likely the biggest gambling city in the world, with only really Macau in China giving it a run for its money. Gamblers spend more than $15 billion a year in Sin City. The state was the first to legalize gambling, nearly 100 years ago, but while it has regulated online poker and sports betting, it has not taken the same step to legalize online table games or slots.
Online Gambling In Nevada
In Nevada, online gambling is not as open as the physical gambling market. Despite there being hundreds of casinos in the state, online iGaming is essentially restricted to poker as well as sports betting.
Despite this, players can access online casinos in Nevada by playing on sites licensed in other states or at offshore casinos. According to poker writer Liliana Costache, offshore casino sites are widely accessible and do not break any state laws.
2023 Nevada Gambling Figures
2023 was a record-breaking year for Nevada when it comes to gambling revenue. Revenue of $15.5 billion for the year was 4.6% higher than the previous record, set in 2022, indicating that the market is continuing to grow.
Slots were the biggest draw, with just over $10 billion in annual revenue, or roughly two-thirds of the total income of retail casinos. In table games, baccarat was the biggest money spinner. The card game is considered easy to learn, has a reasonable house edge, and offers a good variety of betting options. This combination saw it bring in $1.49 billion at tables.
Next up was blackjack at $1.33 billion followed by craps at $467.5 million and roulette at $460 million. Sports betting revenue accounted for $481.3 million in revenue with some $240.7 million of that coming from mobile sportsbooks.
Retail Casino Revenue Cannibalization
With gambling revenue continuing to post annual increases, it is not surprising that opponents of online casino regulation point to a possible cannibalization of the retail casino industry as their biggest complaint. Typically, these arguments are presented by retail casino owners who argue that if players are wagering at online casinos, they are less likely to spend money in physical casinos.
However, some studies not only rebuke this theory but show that online casino regulation can improve retail casino performance. According to one study, the formal regulation of iGaming leads to an increase in retail casino revenue, suggesting that it gives players a taste for casino gambling.
Other reports suggest that the demographics of retail casinos and online casinos are different. The average online gambler is ten years younger than the average retail casino player, which suggests that, at least to some extent, the two platforms attract different players.
As such, fully regulating Nevada`s iGaming market could lead to gains for established retail casinos while also bringing in additional tax revenue for the state.
Offshore Casinos
Currently, gamblers who wish to play online in Nevada have two options.
Some physical casinos offer licensed and regulated mobile betting platforms that can be played while on the casino`s premises. These offer access to all commonly played casino games, but they are not accessible from outside the casino.
The other option is that players use offshore casinos. There are no laws that strictly prohibit Nevada players from doing this and using sites that are licensed in countries like the UK or Malta. However, this means that Nevada fails to take its share of tax revenue, which goes to the countries where the sites are licensed.
Licensing Online Casinos
In states that have legalized iGaming, it is common practice for licenses to be granted only to organizations with a physical casino in the state. In these cases, if retail casinos do lose money to online casinos, they are likely to make this up through their online efforts.
This doesn`t account for the additional revenue that visitors bring to the state, however. Not all gamblers stay in casino resorts and hotels, which means that local hotels, restaurants, and other businesses benefit from the additional income that is brought to the state.
Expanding iGaming Regulations
Expanding Nevada`s online gambling laws is possible. Federal lawmakers have determined that states are free to formulate their own gambling laws, including iGaming laws. This paved the way for Nevada to legalize online sports betting and online poker rooms. However, the path is rarely an easy one.
It first requires a bill to be tabled and for this to pass the legislature. From there, it must be voted on by the public, and there would be heavy lobbying throughout this process. Despite these difficulties, many people believe that it is only a matter of time before the state does see changes implemented.
New Jersey iGaming Regulations
New Jersey is one example of a state with fully regulated and legalized online gambling, although there are restrictions. The only physical casinos allowed in the state must be on tribal land within Atlantic City.
Online casinos must have their servers located on tribal land and within casino property, too. Only physical casinos that operate within the state are permitted to apply for an online gaming license, although existing online casinos can affiliate or partner with a physical casino to launch a joint casino website.
Utah Gambling Laws
Utah, on the other hand, prohibits all forms of gambling, including both physical and online gambling. Utah is a predominantly Mormon state, which means that legalization here is highly unlikely without major changes.
Nevada`s Casinos
Nevada is home to 150 major casinos as well as 300 or more smaller casinos. Casinos and other gambling venues can be found in other cities within Nevada, except in Boulder City and Panaca, where gambling is prohibited.
Gambling was legalized in the state in 1931 with the first license being granted to the Northern Club. After World War II, Nevada saw an influx of gambling investment. Banks lent considerable money to potential owners and casinos including the Sahara, Sands, Riviera, Fremont, and Tropicana were launched.
Approximately 10 million people a year were visiting Las Vegas by the mid-1950s. In 2023, more than four times as many people visited the city, with nearly 41 million people representing the largest number since 2019. Experts expect this number to be even higher in 2024.
Most visitors to the city are from the US, with less than 10% of 2023`s visitors coming from overseas. However, this tourism and the sheer number of visitors that the casinos attract is one of the reasons that many within Nevada continue to oppose the idea of further regulating the online gambling industry.
Nevada`s Other Attractions
The number of visitors that are attracted to Nevada has not only seen its popularity as a gambling city increase, but it has also become an increasingly popular destination for shows and performers.
Current residencies include Santana, Lionel Richie, Janet Jackson, Barry Manilow, Adele, Mariah Carey, Shania Twain, Garth Brooks, Bruno Mars, Pitbull, and Eagles. For those visitors who enjoy taking in the bright lights of Vegas, as well as the incredible shows on offer, it is unlikely that online casinos will draw them away from the big casinos.
A new hotel complex is also planned at the former site of the Riviera next to the Fontainebleau. While the site will not include a casino, it will incorporate a hotel and condos as well as a new spinning ride, which points to another major draw of the city.
These rides are known as thrill rides and they include the Big Shot, which is a vertical ride that powers riders to a height of more than 1,000 feet in a matter of seconds, before dropping them back to the base of the ride. There are dozens of rides and other major attractions like this situated in and on major hotels on The Strip.
Nevada And Online Gambling
While Las Vegas is considered the biggest gambling city in the world, it is also a city of experiences and opulence. These can`t be recreated online and, as such, it is unlikely that opening Nevada`s iGaming industry to allow online gambling on games like roulette and baccarat would cannibalize the state`s retail casino market.
Studies certainly suggest that this hasn`t proven the case in other states and countries that have taken this approach to online gaming. Atlantic City`s approach means that online gaming taxes are set at 15% of gross gaming revenue, compared to the 8% charged against GGR from physical casinos. And the state made more in tax in 2023 than in any year since 2006.
Considering Nevada`s much larger gambling market, they would likely see considerably more tax revenue generated through the opening up of their own iGaming market.
