The casino and gambling business is big business, and it seems everyone is keen to get a share of the ‘winnings’. Not so long ago, America was a country where gambling was largely prohibited other than in specific locations and, even then, not held in high esteem. Las Vegas, the self-declared capital of gambling, also calls itself Sin City – and that is very much where gambling has been positioned in the US psyche.
However, recent changes have led to massive changes in attitudes towards gambling. For one thing, legislators have realized that banning something does not get rid of it but simply drives it underground and into the black market. This means that gambling continues, but consumers have no protections. In addition, state coffers lose out on potential tax revenue from the casino and bookmakers’ profits.
One of the factors pushing this change has been the rise of the internet and online casinos and sports betting sites. Their popularity was then supercharged by smartphones, superfast broadband, and 4/5G connections. It is relatively easy to regulate/prohibit physical gambling locations, but virtual ones throw up a whole other level of complexity. Americans were able to access offshore casinos and betting shops that sprang up to meet demand, meaning it was no longer necessary to get a train or plane to Vegas or Atlantic City to play casino games.
The experience from regulated markets around the world, for example, the UK, encouraged some US states to get a piece of the action. To date, the most significant change in betting and gambling laws in the country has resulted from the Supreme Court overturning the federal ban on sports betting after it ruled the ban was unconstitutional. Now, betting in some form or another is legal in almost every US state, and many legislators are considering additional options for their citizens.
Currently, only seven states have regulated to allow real-money online casino gambling. The established ones are New Jersey, Pennsylvania, Connecticut, Delaware, Michigan, and West Virginia. Online casino gambling revenue in these states was reported to be in excess of USD 500 million in May 2023. Rhode Island launched its online casino market on March 5 this year. Colorado is now deciding whether it wants to allow online casinos, and one of the reservations is the effect that this could have on brick-and-mortar Native American establishments in the region.
However, online casino games are legally being played right across the country as online casinos have introduced sweepstakes, offering a comparable experience for players in states where the legislators have not sanctioned their real money counterparts. As with all online casinos, some are more trustworthy than others, so players need to make the same checks as they would when playing at any online casino or website.
There is evidence to suggest that online players are a different subset to those who play in land-based casinos. In fact, there is an argument to say that online casinos raise awareness of casino games and could potentially drive additional traffic to the more traditional ones.
Many people who might never have stepped foot inside a casino have been introduced to simple slots and table games via social media or games within games. It is widely recognised that adults like to play and their needs are now being catered for by iGaming and online gaming. If people get to experience the thrill of watching a roulette wheel spin or enjoy beating the dealer when playing Blackjack, they might consider a night out at a casino.
If Colorado introduces the necessary legislation, the Native American establishments might find that this boosts numbers. Despite lockdown restrictions that forced many physical casinos to close during the COVID-19 pandemic, most countries report that footfall and takings have now returned to pre-pandemic levels, despite this being the same period in which online participation saw a significant increase in player numbers. It appears that the success of one vertical in the gambling sector does not need to come at the expense of another one. Colorado confirmed last summer that conversations and consultations about online casinos had begun, and talks are now underway.
Colorado law currently allows regulated online sports betting. It has done so since May 1, 2020, when it became legal for residents to bet on everything from football and baseball to hockey and mountain sports. Since its inception, Colorado has reported over USD 400 million in net sports betting proceeds, and this is almost certainly fueling the idea of expanding the state’s online gambling market. However, no one expects it to be straightforward, and there will be many twists along the way.
The first step would be for the Colorado State Legislature to pass online casino laws, which the governor would need to sign off on. In turn, this law would need to be approved by a popular vote. As legislators in California discovered, the road to a regulated online gambling market is not without difficulty. Voters in the Golden State rejected proposals for online gambling when asked, despite millions of dollars being thrown at the ‘yes’ campaign. However, as Colorado already has legalized online sports betting, the chances are that it will be a more acceptable proposition. If the law gets the go-ahead, retail casinos will be able to apply to partner with online operators and apply for licenses. There is no reason that the Native American operators would lose out in this process.
Colorado is potentially a very fertile field for gambling operators. With 20 sports book operators, it is second only to New Jersey, and fantasy sports and pari-mutuel wagering are already legal. The state levies one of the lowest betting taxes in the USA at 10%. Larger gambling states like New York and Pennsylvania charge operators 51% and 36%, respectively, so it will be an attractive market for online operators should the legislation get the go-ahead.
