LIGHTNING BOX
IN A FLASH Lightning Box CPO David Little discusses the quickfire growth in the US online casino market, with Michigan a frontrunner.
DAVID LITTLE
It was 2004 and online casinos were totally banned in the US. Lightning Box was supplying land-based games via IGT to North American land-based casinos. The Federal Wire Act was in place ensuring online gambling was a criminal act. Who could have anticipated, partly spurred on by a global pandemic, that 16 years later, North American casinos would move online so quickly? New Jersey has been somewhat of a stalwart for online casinos in the US. The state, which also allowed casino gambling in Atlantic City, first offered online casinos in 2013. We started supplying our first online games via Chartwell (later Amaya) to that state back when it first became legal. But it was a lonely affair with a limited selection of games available to players. Aside from Delaware, no other US states allowed online casinos, until Pennsylvania changed its mind in 2017 when the house passed a bill legalizing online gambling. The first online gaming sites dipped their toe in the water with sportsbooks launching in May of 2019. Pennsylvania online casinos are now in full swing with a number of options for players to choose from. It was reported that their revenues 44 GAMINGAMERICA
doubled halfway through 2020. Pennsylvania, however, has a hefty online casino tax rate of 54%. On 22 January this year, the Michigan Gaming Control Board (MGCB) officially launched online casino gaming along with online sports betting and online poker. By rolling out the entire iGaming suite, Michigan became the first state in the US to launch all three verticals at the same time. The only other two states to have all three offerings are New Jersey and Pennsylvania. Eight big name online casinos opened including BetMGM Casino, Golden Nugget and BetRivers Casino. These have each partnered with an existing casino licence holder such as MGM Grand Detroit, Motor City and Little River Band of the Ottawa Indians. Michigan has been especially interesting with its opening. IGaming and sports betting operators reported $42.7m in gross receipts for the first 10 days alone since launch. With the state’s population nudging 10 million, it is sure to be a huge market for the sports-loving state. As the MGCB is looking to authorise more casinos with approval to operate, and the fact that it is the first Tribal market to go live, it has been the talk of the town across many iGaming suppliers and operators. With the early success of Michigan, we are likely to see more US states legislate and open up iGaming and sports wagering to its residents later this year. The rumoured states thus far to have iGaming on their radar include the likes of Indiana and Ohio. It’s not entirely all about the US, though. Just across the border, the Canadians have a growing online market of their own. There has been substantial growth in the number of available games on state-run operators like the British Columbia Lottery Corporation (BCLC), Loto-Québec and Ontario Lottery and Gaming Corporation (OLG). The US and Canada combined still have a long way to go before they match the depth and variety of the more established European markets. Suppliers like us have a job on our hands. We need to ensure we are getting the right distribution deals and obtaining the right certifications with the authorised testing laboratories in the multiple legislative markets. But what is clear is that there is exponential growth on its way in the North American markets. With that, we’ll likely see a transition of iGaming power cross over abroad.
