An iGaming study released this week by Eilers & Krecjik Gaming (EKG) raises concerns about another report conducted last year by a competitor gaming industry consulting firm for the Maryland Lottery and Gaming Control Agency.
The authors of that report, The Innovation Group, refuted EKG’s assertions, with an executive from the Las Vegas-based firm telling BetMaryland.com the state agency wanted “an unbiased estimate of impacts” of legalizing Maryland online casino gaming and that the firm stands behind its report.
Maryland state gaming officials awarded The Innovation Group the contract last summer to conduct the study after a competitive bidding process.
Questioning Time Frames
Researchers from EKG, who were commissioned by iGaming trade group iDEA Growth, included a page in their 32-page report on The Innovation Group’s Maryland study. They questioned the data The Innovation Group used to make its findings, including a uniform comparison of years where it compared brick-and-mortar performance in iGaming states versus those that haven’t legalized online casinos.
The Innovation Group Report found that brick-and-mortar casinos in iGaming states had revenues decline by more than 8% from 2019 to 2022. The counterparts in non-iGaming states had revenues increase by 2% over the same period.
“In our view, the selection of these years is at odds with the goal of their study due to the launch dates of the six states with online casino availability,” the EKG report stated, noting New Jersey and Delaware launched iGaming nearly six years before the next state, Pennsylvania.
In the EKG report, researchers found that five of the six iGaming states posted higher growth at their brick-and-mortar casinos than states without legal online casinos.
Brian Wyman, a partner and executive vice president for The Innovation Group, defended their process, noting that iGaming “exploded” during the COVID-19 pandemic, even in New Jersey.
“We believed that looking at a recent full year, pre-pandemic, versus a recent full year, post-pandemic, was an appropriate way to capture the effects of the dramatic iGaming growth that occurred,” Wyman said.
Wyman added that The Innovation Group maintains a good relationship and respects the work EKG performs. It was “disappointing” to him that Eilers researchers did not contact them initially, which he said might have “bridged some of the disconnect early on.”
Offering Independent Analysis
Since The Innovation Group’s study was released in November, critics of legalizing iGaming have come out in force to argue against enacting it in Maryland. A report released last month by the Sage Policy Group for the Anne Arundel Chamber of Commerce claimed online casinos would cannibalize the state’s six brick-and-mortar casinos, leading to direct and residual revenue and job losses. Those six Maryland casinos reported more than $153.24 million in revenue in January.
EKG’s report, which was released Thursday, came out less than two weeks before committees in both the Maryland House and Senate consider separate bills. If either pass, the bills would ask state voters to approve an iGaming referendum on the November ballot. It countered arguments that online casinos take away from established venues and said the data shows iGaming helps operators boost brick-and-mortar revenues.
Wyman said the analysis work his firm produced was challenging and required significant thinking and discussion. He added that The Innovation Group is not “anti-iGaming” and that it provides objective, independent analysis for its clients in the gaming industry and tribal, state and federal governments.
“Our work was performed for a client asking for an unbiased estimate of impacts, and we tried to thoughtfully provide that in a way that was not only accurate but intuitive and easily explainable to a broad audience,” he said. “We believe and stand by our work, but also in the belief that legislatures should be provided neutral information so that they can make good policy decisions.”
There will be many twists on the road to potential iGaming in Maryland. Count on BetMaryland.com to be there every step of the way, as well on issues related to Maryland sports betting.
