JACK Entertainment Executive Says iGaming in Ohio Would Devastate Casinos

Posted on: April 18, 2024, 12:55h. 

Last updated on: April 18, 2024, 10:03h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

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.

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.”

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 more than 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 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.