Chris Murphy Editor of SBC Americas details a chaotic first two months of US legislative activity post-SCOTUS’ repeal of PASPA’s federal mandate. What sense if any can the industry make of early US state adoption of sports betting laws…
More than two months have elapsed since the landmark ruling that saw the Supreme Court of the US (SCOTUS) overturn the Professional and Amateur Sports Protection Act (PASPA). If we have learned anything from those eight or nine weeks of frantic activity it is simply that when it comes to the legalisation of sports betting in the US, it’s a case of every state for itself
So where are we at post-PASPA? While a number of states had prepared for the historic moment by getting sports betting legislation in position, it was the aptly nicknamed ‘first state’ Delaware that was first out of the blocks with a fully regulated sportsbook via its long-established state lottery.
Next up was New Jersey, with governor Phil Murphy at the head of what transpired to be a small queue waiting to place that first historic bet. But it was a quiet Tuesday afternoon! Third in line was Rhode Island, with Mississippi the latest state to go live with a fully compliant sportsbook. Waiting in the wings is Pennsylvania, but as the battle lines remain drawn between betting operators and the major sports leagues it’s unclear how things will materialise there.
Then there was New York, which ‘did a Maryland’ by failing to get its new law signed off before the close of a state legislature. Like Maryland, it will have to wait at least another year before reopening the legal process, although a 2013 law could enable upstate casinos to offer limited sports wagers.
Pennsylvania has another major issue to contend with, namely a prohibitively high tax rate of 36 percent and a $10m fee for operators who want to be granted a licence to operate there. It’s not alone in charging high for the privilege of offering a sports bet. Rhode Island state will take more than half (51 percent) of all gaming revenue in a bid to fulfil an ambitious budget of $23.5m earmarked by governor Raimondo.
And it’s Rhode Island that perhaps affords the clearest window on the emerging legal sports betting sector in the US – at least in terms of the way that taxation and legislation are influencing how the business will shape up. For governor Raimondo to realise her $23.5m dream, the state’s two casinos will, between them, need to generate $910m in wagers in the first year. Anything is possible, but in this case it’ highly unlikely.
The backdrop to all this activity has been a prolonged and intense campaign by the major sports leagues who, understandably some might say, believe they’re entitled to a share of the revenue from sports wagering. But with the exception of New York, which made provision for an integrity/royalty fee in its legislation, the leagues’ have been given the brush off. Rhode Island went so far as to expressly prohibit any such payment.
In a nutshell, the US sports betting market is less of a fledgeling and more of a curate’s egg. The overriding impression is that legislators and state bigwigs have failed to grasp the concept of a business that operates on margins that are tighter than a clam with lockjaw. Hopefully, as the business shakes out over the next few weeks and months, one of the early adopters of legal sports betting will emerge as the benchmark state for others to follow. Until then; every man/state for himself!
The ‘Betting on Sports Conference’ (#boscon2018 – Olympia London-17-20 September 2018) will have a dedicated track on US sports betting – ‘Betting on Americas’, detailing expert insights and knowledge on US market movements. Click on the below banner for more information…