As Virginia considers legalizing online casino gambling, research found that similar online gaming expansion in New Jersey reduced overall economic activity by approximately $180 million.
That finding was cited in a February 2024 report released by Morgan State University’s Center for Data Analytics and Sports Gaming Research examining the potential impacts of interactive gaming.
The report, titled “The Socio-economic Impact of Legalizing Interactive Gaming (iGaming) and Online Betting in Maryland,” analyzed the fiscal and economic effects of gambling expansion and referenced New Jersey as a comparative case study. It was authored by Dr. Ali Emdad, executive director of Research Centers at Morgan State University’s Graves Business School.
According to the report, the New Jersey research found that gaming expansion decreased overall economic activity and curtailed jobs and wages, and that public costs attributable to digital gaming “could be roughly equal to the state’s takings”.
The Maryland analysis also examined the effects of mobile sports betting within that state. Maryland’s commercial casinos generated $854.7 million in gaming tax revenue in 2022, including $617.1 million for the Education Trust Fund and $108.3 million distributed through local impact grants.
After mobile sports betting launched in late 2022, however, income from physical sportsbooks “significantly decreased,” the report states, affecting investments in brick-and-mortar sportsbooks and earnings from slot machines and table games due to a drop in customer visits.
The report notes that online casino platforms provide continuous access through mobile devices and suggests consumer behavior may shift as a result. The authors recommend that states conduct comprehensive fiscal and economic analyses before authorizing iGaming, including multi-year data reviews and evaluation of regulatory and social costs.
The Virginia General Assembly currently is considering proposals that would authorize internet casino gaming, often referred to as iGaming, and place it under the authority of the Virginia Lottery Board.
Senate Bill 118 would create a regulated online casino market in Virginia and authorize internet gaming and establish oversight through the Lottery Board, according to the Virginia Legislative Information System bill summary.
A fiscal analysis of SB 118 says the proposal would allow licensed casino operators to run online gaming platforms and would impose a 20% tax on adjusted gross internet gaming revenue.
In the House, House Bill 161 outlines a similar regulatory structure and a 15% tax rate, as described in the House fiscal impact statement.
The Senate has advanced SB 118 to the House after a floor vote, while HB 161 has moved through House committee review and awaits additional consideration before reaching the full chamber. With crossover deadlines approaching, lawmakers could take additional floor votes as early as next week to determine whether online casino legislation continues advancing this session.
