Study Says Indiana Online Casinos Won’t Impact Retail Venues

Study Looks at Impact of Online Casinos in Indiana

By Jane Shaw Senior Editor Updated: 01/24/2024

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We count on Jane to inform our readers about the latest slot games in the US market. With her passion for video games and a degree in engineering, she’s our gambling tech expert. Jane’s also active in our blog section, where she tackles the curiosities and changes in the industry.

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Online Casinos in Indiana

Reassurance for State Casinos

The findings of Spectrum’s comprehensive study come as a reassurance to the state’s commercial casinos. While the launch of online casinos would be expected to have an impact on retail casinos, the overall effect is unlikely to be damaging, according to the findings of the study.

In 2022, Spectrum conducted a similar study to learn more about the possible impact of online casinos. However, due to various changes within the online gambling industry, Indiana gaming regulators decided to commission a second study.

Spectrum’s report looked at the potential impact of iGaming on four key gaming sectors, namely retail casinos, digital sports betting, the state lottery, and horse racing. To gain insights, the firm analyzed the online gambling industries in Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia.

One of the primary concerns regarding the launch of online casinos is the risk of online platforms drawing revenue away from brick-and-mortar establishments. Spectrum’s investigation revealed a mixed scenario across the states they examined. While retail casinos in Delaware, New Jersey, Pennsylvania, and West Virginia experienced revenue growth in 2023 compared to 2019, Michigan and Connecticut saw a decline.

Despite the mixed results, Spectrum concluded that iGaming was unlikely to have a damaging effect on Indiana’s retail casinos. This optimism was partly down to the fact that Indiana’s market closely resembles those states where retail casino revenue continued to flourish alongside online casino launches.

In addition, Spectrum believes there would be no negative impact on sports betting. In the report, the company wrote that based on results from other states:

…Spectrum believes that the introduction of iGaming would have no negative impact on sports betting. If anything, iGaming would help to increase sports betting revenues, as both activities are typically offered on the same mobile app, thus promoting crossover play between the two types of gaming.

The research also indicated that the state’s Lottery and Indiana horse racing would not be negatively impacted by the introduction of online casinos.

Promising Revenue Projections

Spectrum’s revenue projections for Indiana’s online casinos were also promising. Using three revenue models, the analysis suggested that the expected revenue for Indiana’s online casinos would start at $489 million in the first year, rise to $696 million in the second year, and peak at $880 million by the third year.

In total, Spectrum believed that Indiana’s online casinos could generate an impressive $2.1 billion in revenue during the first three years of operation.

In addition, Spectrum’s analysis included revenue projections for potential tax income for the state. At different tax rates, the estimated tax revenue from online casinos over three years ranged from around $413 million at a 20 percent tax rate, to $619 million at 30 percent, and nearly $1 billion at a 45 percent tax rate.