When we typically think of the gambling industry, we think of massive brands like Caesars Palace, DraftKings and BetMGM, the titans that have helped the industry grow exponentially in recent years. While they are a key factor in what looks like a golden era of mobile betting today, they’re far from the end-all, be-all in the industry.
Local businesses play an important role in every market, which is why they’re often cited as the backbone of the American economy. One may not immediately think of local businesses in the gambling industry like they do the competition between mom and pop shops and McDonald’s in the restaurant businesses, but they exist nonetheless. Here’s a look at how small businesses impact and are impacted by the gambling industry.
Perhaps one of the most famous examples of small businesses in the gambling industry are the casinos you’ll find on Native American reservations here in the United States. Long before apps like BetMGM, DraftKings or FanDuel ruled the industry with some of the best betting promos, reservations were one of the frontrunners in the world of gambling outside of Las Vegas.
That’s because of their protected status as sovereign land, independent nations outside of the sway of the United States. Reservations and their gambling facilities are exempt from federal and state taxes, which can get pretty hefty when it comes to gaming and other big businesses, making them an extremely popular location for casinos.
While it’s good to see the reservations profiting off of outside business, creating jobs and bringing in revenue, it’s far from a perfect fix, given that gambling addictions among populations already at risk can stem from this easy access.
Mechanisms for Social Change
Given the fact that the gambling industry is typically seen as one dominated by massive corporations who already have extensive means, some states are trying to change that stigma from the ground up.
Maryland legalized sports betting in 2021. Since then they’ve tried to break down barriers for traditionally marginalized demographics, namely women and minorities, to enter the industry. Per the Maryland Department of Commerce’s official website, one way they’ve done so is through the Small, Minority-Owned, Women-Owned Business Sports Wagering Assistance Fund (SWAF), which aims to “maximize the opportunity for small, women and minority-owned businesses to participate in the sports wagering industry.”
This initiative receives funding through the licensing fees that Maryland charges major sportsbooks to begin operating. Essentially, the state is paying those fees forward as they try to help new demographics get their feet wet in the lucrative industry.
As we’ve seen over the past half decade, the gambling industry is very much powered by copycats. States were slow to legalize the pastime at first, refusing to do so outright or enacting heavy restrictions in doing so, but as they saw the rampant success of other states who were quick to jump on the trend, that tune quickly changed. While Maryland is one of the trendsetters in terms of promoting the involvement of female and minority business owners in the sports gambling industry, they’re almost certainly not going to be the last.
Many states and betting platforms are sensitive to the social stigma that the gambling industry holds. As such, they’re always looking for new ways to change that reputation through community involvement, devoting tax revenue to social change programs in the same vein as the SWAF.
FanDuel Sportsbook, for instance, is one of the few major brands owned and operated by a woman, CEO Amy Howe. Having already broken down barriers herself, Howe wants to continue paving the way for more women to enter the industry. Just as Maryland is a frontrunner on the governmental side of things, Howe tries to spark change through her business operations.
Small Businesses Outside the Gaming Industry
Betting also impacts businesses only tangentially related to the wider industry. Plenty of corner stores, grocery stores and gas stations offer betting opportunities ranging from lottery tickets to electronic arcade or slot machines.
Ease of access is king in today’s increasingly online and interconnected world, which is part of why the mobile gaming industry has exploded the way it has. It’s much easier to pop down to the corner store to have a spin of the slots than it is to travel all the way to the nearest casino chain, which can be few and far between if you aren’t in a big city. These machines can range from traditional gambling opportunities like slot machines to skill-based games (think pinball or other arcade games) that sit in a sort of legal gray area without set return on investment values.
Given the hefty cost involved in operating a major casino, having a machine or two makes it possible for small businesses to bring in some extra revenue without breaking the bank and expanding operations.