The decade-long legal challenge to overturn the Professional and Amateur Sports Protection Act (PASPA) was a one-state fight, but other states stood ready to enter US sports betting when the Supreme Court accepted the case.
It turns out New Jersey was far from the only state interested in undoing Nevada‘s monopoly on legal and regulated sports betting in the United States.
It was a bit of a delayed reaction, as most states already adjourned their legislative sessions for the year by the time May 14, 2018 arrived. The decision opened up the floodgates for sports betting legislation.
Over the past year, 38 states representing nearly 90 percent of the US adult population have introduced more than 150 bills on the topic. Sports betting is arguably the most-talked about policy issue in state capitols across the country.
Here’s a look at some of the highlights, key issues and the evolution of sports betting from the legislative front since the PASPA decision.
States move quickly on sports betting legislation
Online gambling in general has been a slow burn in state legislatures, with some states having considered the issue for a decade without movement.
The green light from the Supreme Court sparked immediate action from legislatures on legal sports betting. Some states even started early.
Delaware, Pennsylvania and Mississippi had passed legislation to legalize sports betting in previous years, and West Virginia anticipated the legal decision by passing a bill before it adjourned in March 2018.
New Jersey and Rhode Island passed new sports betting bills a month after the ruling. The year ended with seven states joining Nevada in allowing sports betting, not including Arkansas voters giving their approval at the ballot.
So far in 2019, Indiana, Iowa, Montana and Tennessee have passed sports betting legislation.
States on the cusp of legalization
Four states legalizing sports betting might not seem like a great ratio in comparison to the number of states that have considered the issue this year.
That’s a little misleading, as many other states have made significant progress toward authorizing sports betting in 2019.
Lawmakers tend to wait until the end of their legislative sessions to pass bills, and these states are primed to join the fab four in the next month:
- North Carolina: The Senate passed a bill that would simply add sports betting to the Class III games allowed at the state’s two tribal casinos, and the House is expected to follow by the end of the month.
- New Hampshire: The House overwhelmingly passed a bill for the lottery to run sports betting. With a key senator giving up on his dream of attaching casinos to the bill, it is poised to pass this month.
Other states with a decent shot at passing sports betting legislation this year include New York, Michigan and Illinois.
One full legislative session following the Supreme Court decision, the number of states allowing single-game sports wagering could increase by 15.
Key policy issues since PASPA overturned
A year after PASPA, states have gone in a number of different directions with sports wagering legislation. No two states look the same, which is consistent with the fractured way states approach gambling in general.
Here’s a look at how some of the key policy issues played out over the past year:
- Integrity fees down but not out: When states started exploring sports betting legislation, professional sports leagues thought they could demand 1 percent of handle as an integrity fee. States legislatures haven’t been receptive, as no state has passed a bill with such a fee. However, states such as NY, CT, MO and IL continue to explore giving the leagues some percentage.
- In-play betting: Lawmakers generally understand betting on outcomes of games. There’s a reasonable chance they’ve even placed such a bet. Betting on games in progress and proposition bets have needed explanation in state legislatures, opening up new regulatory concerns.
- Official league data: Capitalizing on the narrative that in-play betting requires the fastest and most accurate data, the leagues have found some success in convincing legislators to require the use of official league data for such wagers. Tennessee was the first state to make that requirement, and Illinois is considering doing the same.
- Collegiate betting in-state: The NCAA opposes regulated sports wagering on its games. Lawmakers seem to realize that not regulating wagers that can be made on the black market is a bad idea. But many states are reaching a weird compromise to prohibit wagers on local collegiate teams for games played in the state.
Evolution of sports betting legislation
Here’s a look at some of the emerging and changing perspectives toward sports betting in state legislatures one year after PASPA’s demise:
- Bigger states looking for more upfront money: When Pennsylvania passed legislation asking for $10 million as an initial fee for a sports betting license, people wondered if anyone would apply. It delayed the market launch, but PA now has eight licensees that paid the high figure with a ninth likely on the way. This month, New York lawmakers added a $12 million initial fee to their bill, while Illinois is throwing around unprecedented figures up to $20 million.
- Leagues becoming more aggressive about “partnerships”: Unhappy about the number of states to move forward with sports wagering without giving them a cut, professional sports leagues are starting to be more aggressive at hearings. This month in Illinois, league reps told lawmakers that they are only going to push for fans to seek regulated gaming options in states that treat them as a partner.
- Mobile matters: New Jersey got off to the best start of any new states offering sports wagering because it allowed for mobile betting with remote registration. States that started solely with land-based wagering or an in-person signup requirement are realizing their mistake. Rhode Island passed a subsequent law to add mobile wagering. New York lawmakers regret not including mobile in the 2013 ballot initiative to allow sports betting at commercial casinos.
- The new bad actors: Illinois is considering a three-year penalty box for daily fantasy sports companies that operated in the state previously. This is despite the fact that they operated during a gray period of legality and that sports wagering is different from DFS. With DraftKings sportsbook and FanDuel sportsbook dominating NJ market share with more than 80 percent of online wagering, stakeholders in more states may try to gain a legislative advantage.
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