Online gambling has exploded, but what does it mean for Utah?
Restrictions wrought by COVID-19 have busted income streams for casinos in Las Vegas and around the world, but amid limitations on in-person betting, online gambling is hitting new revenue jackpots.
And experts warn that for those with a penchant for exceeding the limits of responsible gambling, pandemic conditions have created a perfect setting for bad decision-making.
So what does that mean for states like Utah, a state that has a century-old blanket ban on gambling and, about a decade ago, bolstered restrictions on online gambling?
Data assembled by the American Gaming Association reflects total U.S. commercial gambling revenue was $24 billion for the first 10 months of 2020, a 33% drop over the same period in 2019. And of that revenue last year, more than $19 billion came from in-person casino gamblers.
Meanwhile, the Wall Street Journal reports that gross revenue from online casino games more than tripled during that period. The total revenue amount was still, comparatively, only $1.23 billion. Sports betting, including online sports wagering, rose 39% to more than $957 million.
Five states — New Jersey, Pennsylvania, West Virginia, Delaware and Michigan — have legalized online casinos, which include digital versions of slot machines and roulette, while Nevada limits online casino games to just poker.
A 2012 legislative update to Utah’s complete restriction on gambling, the basic tenets of which are enshrined in the Utah Constitution, aimed to specifically prohibit any forays into online gambling ahead of expected changes at the federal level.
While that proposal passed easily, even a very basic internet search will currently yield multiple options for Utah residents to play casino-style games and place bets on sporting events, for real money.
Utah-specific information available on many of those sites note that online gambling is illegal for state residents, but typically also include statements like the following, which was taken verbatim from one gambling site:
In response to the question, “Are sportsbooks legal in Utah?”: “No. Utah is one of two U.S. states (along with Hawaii) that bans all forms of gambling. That being said, Utah sports bettors still play at offshore online bookmaker sites, while Utah law enforcement doesn’t prosecute residents who play online.”
And in answer to, “Are online casinos legal in Utah?”: “Online casino players can gamble online at offshore casino sites without being prosecuted, but online gambling exists in a legal gray area. In Utah, online casinos are banned, like all other forms of gambling. Law enforcement doesn’t have the resources to enforce an online gaming ban.”
It’s impossible to know how many Utahns are taking these types of statements to heart and jumping into the online gambling fray. But those states in which online gambling is legal have technology tools like “geofencing” to identify exactly where an online gambler is logging on, to make sure the bettor’s phone or computer is inside the state.
That still leaves offshore operations that are outside U.S. jurisdictional boundaries that cater to American gamblers.
Is Utah prosecuting online gamblers?
The Utah Attorney General’s Office said that while enforcing against individual online gamblers is a challenge, the agency works to uphold the state’s gambling prohibitions.
“Utahns who engage with gambling sites on the internet are breaking the law,” a statement from the office reads. “The attorney general’s office has had numerous success on enforcing the gambling laws in the past few years. We work with local law enforcement jurisdictions whenever we can to combat gambling machines. That effort is ongoing, even as resources are stretched thin for all law enforcement agencies during the COVID-19 pandemic.”
The attorney general’s office said it was unable to provide data reflecting how many, if any, individuals in Utah have been prosecuted in the past year for engaging with online gambling sites. They noted the obstacles for investigators span jurisdictional boundaries.
“State, federal and local law enforcement here and in other states run into the same issue with online gambling,” a statement reads. “Connections are usually individuals gambling in their own homes undetected and unnoticed and the providers of online gambling sites could be based anywhere in the world.”
And the Salt Lake County District Attorney’s Office said when it comes to chasing down online bettors, it is a task that falls outside their purview.
“The Salt Lake County District Attorney’s Office regularly prosecutes cases involving illegal gambling,” the statement reads. “However, generally online gambling is an area investigated by the federal and state agencies.”
Unlike Hawaii, the only other state with a similar all-inclusive ban on gambling, Utah shares a long border with a state that has embraced legal gambling and for which it is a primary economic driver.
That has led to Nevada suffering some of the worst consequences of conditions and restrictions created by COVID-19 that had casinos there shut down completely for over two months early in the pandemic and which have only recently begun coming back on a patron-limited basis.
Utah bettors contribute plenty to the coffers of Nevada-based gaming operations, and some estimates have Beehive State residents driving as much as 90% of the revenues generated in border casino towns like Wendover.
Data from The Nevada Gaming Control Board indicates that Utah gamblers may also be helping insulate Wendover casinos from the worst of COVID-19 impacts. Wendover gaming operations generated more than $36 million in revenues over July and August last year — down just 6% from 2019 — while Las Vegas Strip casinos saw their collective revenues plummet some 40% over the same two-month time period.
Pandemic increases of addiction, depression
Gaming industry group CDC Gaming reported in March that conditions created by the pandemic have led to circumstances that can aggravate issues for those facing challenges with gambling addictions.
The group notes that almost all of the factors that are believed to contribute to gambling harms, including depression and anxiety, now exist in enhanced or increased measures thanks to the public health crisis.
Many people already struggling with gambling addictions now have more time on their hands and are stuck at home due to local or national government-imposed restrictions. Those conditions can lead to deeper feelings of isolation and separation, which “can lead to a dramatic increase in depression, boredom and loneliness. Some may see online gambling as a ‘way out.’ Others may be desperate to ‘make up’ for lost income.”
Lin and Aaron Sternlicht from New York-based therapy group Family Addiction Specialist report the increasing number of individuals seeking help to address gambling addiction amid pandemic conditions is creating new challenges for therapists and the gambling industry.
“Current evidence suggests that the number of people experiencing mental health related issues as well as addiction related issues is on the rise,” the Sternlichts posted in a recent blog. “The data indicates a significant uptick in online gambling is occurring, so much so that it has forced political leaders, gambling councils, and the industry itself to place restrictions on the frequency of betting and amount that can be bet as well as on advertisements that promote gambling.”
The National Council on Problem Gambling said individual health risks may be exacerbated by uncertainty amid the pandemic and job changes and financial stresses can also play a role. In addition, access to treatment providers like professional counselors or self-help meetings may be curtailed due to social distancing and personal illness.
The Salt Lake chapter of Gamblers Anonymous has had to cancel some of its weekly meetings due to public health concerns but has seen an increase in participants in their online groups that have been substituted for in-person support.
And the pace of online gambling can make it even easier, and faster, for those with issues to lose a lot of money in very little time.
Veteran gaming industry consultant Dennis Conrad told the Deseret News that there was a time when the big casino operators shunned and criticized the emergence of online gambling. But he said even before the pandemic, a trend was underway among large U.S. gaming companies to add to their brick-and-mortar casino portfolios by developing, or acquiring, online gaming operations.
And it’s only accelerated since COVID-19 slammed the doors closed on casinos across the country.
“The last few years, and especially since the pandemic, companies are jumping into the online version of the business,” Conrad said. “They went from saying online gambling was a big, ugly thing to chasing down their own operations.”
Conrad said replicating the experience of in-person gambling on table games like poker or roulette or machine games like slots has been a fairly seamless process for operators moving into the digital realm. But one big difference is how fast those games can move in their online versions.
“A great example is a slot machine that, in its physical version, may take seven or eight seconds to complete a play,” Conrad said. “I haven’t timed it, but the online version is a matter of just a few seconds.
“In a real poker game, you’re usually waiting around for at least one player who plays slow or doesn’t know how to handle your cards and it slows down the play. When you’re online, none of that happens and the game moves much faster. Some people are going to put their credit card up and blow through the whole thing in a day.”
The Utah Department of Health estimates over 2% of Utah adults, or more than 60,000 residents, may manifest a problem when it comes to gambling.
Anyone facing personal challenges with gambling can contact the National Problem Gambling Helpline at 800-522-4700. Additional resources are also available through Gamblers Anonymous at www.gamblersanonymous.org.