How the iGaming Industry Influences Commercial Real Estate

Yes, as weird as it sounds, iGaming and commercial real estate are the industries that affect one another. Or rather, iGaming influences real estate prices, but not vice versa (at least for now). If you are confused and can’t come up with a single idea as to how these two industries are connected, don’t worry - a rare person who doesn’t work in either realizes that there is actually a relationship between the two. And it is about to evolve together with the iGaming industry. Just keep reading, and you will get it.

But first, to get this out of the way, a quick and almost certainly unnecessary vocabulary pause. iGaming refers to the online casino industry, as well as online poker, blackjack, baccarat, live casinos, sports betting - you name it. Basically, if you can place a bet online and have fun, that technically qualifies as iGaming. If you are new to the concept, go to SlotsUp and find a trustworthy online casino with good reviews and a wide choice of games.

In some places, the iGaming industry affects commercial real estate prices directly.

This does not apply to the United States as much, but in some countries, online casino operators have the power to affect the real estate market. China and the Philippines are a great example. Online casinos are very popular yet sadly illegal in the PRC. On the contrary, the Philippines welcome online casino operators to come to the country, buy commercial property, and set up an online casino for people from across the globe to place bets and bring operators revenue. Chinese gamblers get their entertainment; the Philippine government gets to collect taxes and enjoy foreign investment. It is a win-win for sure.

If you doubt that it is a serious trend, check out the numbers. Chinese iGaming operators have occupied 30 percent of the 775,000 square meters of office space built in the Philippine capital Manila in 2018. On top of that, Chinese online casino owners who come to Manila are also buying and renting apartments for their employees, which means that iGaming is affecting both commercial and residential real estate markets.

The situation is not unique to the Philippines. For example, residential real estate is getting steadily more expensive in Malta because many wealthy foreigners are buying property there to enjoy legal gambling.

In most places, land-based casinos mediate the effects of the iGaming industry on commercial real estate.

When a new land-based casino (especially a large one) is constructed in a certain neighborhood, it affects real estate prices there. Now, the fun thing is, whether it makes them higher or lower depends on the neighborhood, dominant industries in the area, population, residents’ average income, and a bunch of other factors. One study published in The Washington Post shows that property next to land-based casinos tends to be a little cheaper. However, if casinos suddenly begin to leave Las Vegas, real estate prices will drop there because gambling is a major part of the local economy.

So, back to iGaming. No matter what the owners of land-based casinos are saying, online casinos are serious competition. As the latter are growing more and more popular, the former are struggling, especially in light of this year’s pandemic-caused lockdown. Several owners of huge casino networks are doing anything they can to make online casinos unavailable to Americans, but to no avail. The increasing popularity of online gambling is affecting brick and mortar gambling, which, in turn, affects real estate. Again, whether property prices are growing or shrinking varies from place to place.