Rush Street Chairman Bluhm Optimistic On iGaming, But Still Sees Place For Casinos

Casino magnate wary of offshore operators potentially seeking U.S. entry
rivers casino exterior
Facebook
Twitter
Email

CHICAGO — Rush Street Gaming Chairman Neil Bluhm struck an optimistic tone about the future of the gaming industry in delivering the keynote address at the National Council of Legislators from Gaming States on Monday.

Bluhm feels that future should include more iGaming, and he expressed a hope that legislators and regulators would scrutinize offshore operators trying to get licensed in the U.S. He also talked about the successful pivot the gaming industry was able to make during the COVID-19 pandemic with regard to online sports wagering, as mobile betting has taken what looks to be a permanent foothold in the U.S.

But he added there remains a place for brick-and-mortar casinos, which he labeled the “economic engine” of providing revenue to state governments in conjunction with iGaming.

Trying to ride a resurgent wave with reopening

After detailing his rise to becoming one of the most prominent figures in American gaming, which includes Rush Street opening casinos in Pennsylvania, New York and Illinois, Bluhm noted that the “gaming hospitality industry was unfortunately near the top of that list” of sectors severely impacted in the U.S. by the pandemic before regaining its footing in recent months with states fully reopening.

“The good news is that through the commitment of our partners and the terrific work of our industry leaders, we’ve all reopened and, as we would have predicted, we’ve seen a lot of customers return,” Bluhm said. “There’s a pent-up demand and people want to have fun again, and they’re showing up to give our properties a try. Hopefully this will last. This pent-up demand won’t last forever, but right now, business is suddenly good after being closed for so many months.”

Bluhm also touched on the rise of mobile sports betting and iCasino, two areas that greatly expanded where legal — including Illinois in the former and Pennsylvania, New Jersey, and Michigan in the latter. He pointed out the increase in sports wagering handle from $13 billion in 2019 to $21.5 billion last year was part of the process in taking Rush Street Interactive public via SPAC in July 2020.

“We took aggressive steps at RSI to increase our investment in a product and technology,” he explained. “One of the main reasons we took RSI public at the end of last year was to have more capital so we can have technology and far more funds available for marketing.

“While we were stuck at home, mobile sports betting and iGaming experienced really significant growth.”

The brick and mortar still holds value

Even with the dramatic rise in sports betting revenue year over year — the $1.5 billion taxable revenue in 2020 nationwide represented a 69% increase versus 2019 — it still paled in comparison to the $41 billion in taxable revenue originating from brick-and-mortar casinos last year, and Bluhm felt the brick and mortar can also serve as a mortar of sorts to online casino gaming.

“If you’re going to allow sports betting, why not allow online casinos?” he asked aloud. “Both of them are gambling. In states that allow both, the total revenue of online casinos is often two to three times more than the revenue of sports betting. That’s why states like New Jersey and Pennsylvania are doing so well. It’s illogical not to allow both, and it costs the states money.

“That’s why policies need to approach integrating between brick-and-mortar casinos and sports betting and iGaming. … Most importantly, data clearly shows that if you include online casino with sports betting, far more revenue is created for the state. Let’s protect the economic engine of brick-and-mortar casino while expanding and building the online market and maximizing revenue for the state.”

A call to scrutinize offshore entities

Bluhm also stressed the importance of continuing to combat the illegal offshore gambling operations that remain available to U.S. bettors, noting they are able to reap financial revenue benefits while they “create no jobs, no tax revenue, and do not have the American consumer interest in mind … and face limited recourse for illegally serving U.S. customers.”

One such offshore sportsbook, 5Dimes, shuttered its U.S. operations last year and reached a $46.8 million settlement with the Department of Justice in September. The sportsbook further raised the possibility of seeking a license in the U.S. after launching online casino gaming and sports wagering in the Isle of Man in February, and Bluhm feels states should hold such entities to the same standards as casinos should they apply for licenses.

“Gaming licenses are a privilege and not a right, and that’s something U.S. casino operators currently recognize and take very seriously,” he said. “I am concerned about one thing — some companies who may have operated illegally outside the U.S. and online casinos or sports betting and engaged in illegal gaming may be able to get licensed in the U.S. for sports betting or online gaming when they would not been eligible to be licensed for brick-and-mortar casinos.

“States should have the same standards for online gaming that they do for brick-and-mortar casinos.”

Photo: Shutterstock

Facebook
Twitter
Email

Related Posts

(function ($) { "use strict"; $(window).load(function(){ $('body').on('load', function(){ $(this).addClass('windowLoadFired'); }) }); })(jQuery);