The House of Representatives recent meeting to explore federal regulations for sports betting provides the backdrop for this month’s update on the passage of US legislation.
After spending many months in the jurisdiction of SCOTUS, gambling policy has found its way back to Capitol Hill. On 27 September, while the Senate Judiciary Committee heard Christine Blasey Ford testify about the conduct of Supreme Court justice nominee Brett Kavanagh, the House of Representatives held a hearing to explore federal regulations for sports betting—a concept that is largely backed by House Republicans.
No ins, outs or what-have-yous were discussed in terms of what a federal regulatory policy might look like, but the hearing was undoubtedly a platform for discussion on the negative impact of legalised sports betting and the need to do something about it.
Any bill emerging from the hearing would likely seek to curb the expansion of legalised sports betting, although there has been no speculation yet as to how its authors would avoid the fate of PASPA, which was struck down as unconstitutional.
Based on concerns expressed during the hearing by Rep. Bob Goodlatte , by the scope of the Goodlatte-supported federal online gambling prohibition and by the Constitution’s barring the federal government from regulating intrastate activity (see PASPA), a federal measure restricting sports betting would presumably take aim at interstate commerce.
Meanwhile, not a lot has changed at the state level, as the next wave of states to legalise sports betting is not expected until next year. Following is a summary of recent activity.
West Virginia: Mobile betting coming soon
Two operators in West Virginia—Hollywood Casino at Charles Town Races and FanDuel Sportsbook at Greenbrier Resorts—have rolled out land-based sportsbooks, and mobile betting could be available in the state by the end of October.
Meanwhile, Delaware North has delayed the launch of sportsbooks at Wheeling Island and Mardi Gras casinos. Under the state’s new sports betting law, casinos can offer online and mobile wagering to patrons located physically inside state borders.
Mississippi: Sports books report early results
Mississippi is the third state, following New Jersey and Delaware, to initiate legalised sports betting following PASPA’s repeal. Gold Strike Casino in Tunica and Beau Rivage in Biloxi opened their doors for business on 1 August and combined to take nearly $6.3m in sports bets during the month.
The venues may only offer sports betting on casino premises. Wagering via handheld devices will be allowed, but only if the participant is physically located on the casino property.
Pennsylvania: Five sports betting applicants watch the NFL season slip away
The Pennsylvania Gaming Control Board is reviewing sports betting license applications filed by five of the state’s 12 casinos operators: Hollywood Casino, Parx Casino, Harrah’s Casino, SugarHouse Casino and Rivers Casino.
Against a staggering $10m licensing fee and the 36% tax rate, how many of the other seven operators join the fray remains to be seen. Live sports betting is expected to commence in November at the earliest, so the initial licensees will not have very many weeks of NFL betting to offset the hefty cost of entry.
Meanwhile, nine of the state’s 12 casino operators have applied for umbrella online gambling licenses covering slots, casino games and poker. The remaining three operators — Lady Luck Casino Nemacolin and Presque Isle Downs, Meadows Racetrack and Casino and Mohegan Sun—have until 13 November to apply for a la carte licenses at a cost of $4m per category.
The regulations allow for 12 licensees, so if any or all of the remaining three Pennsylvania operators don’t apply by the November deadline, the state will open the door to out-of-state applicants.
Rhode Island: Hopeful for mid November
State officials in Rhode Island are still hoping to have sports betting up and running by mid November. The Rhode Island Lottery has formalised details of a significant partnership with gaming technology provider IGT and sports book operator William Hill, which has agreed to oversee management services at the Twin River Casino and Tiverton Casino, the state’s only licensed video lottery and table game establishments.
Kentucky: Integrity fee could now be in play
A bipartisan group of legislators is drafting a sports betting bill, which it plans to pre-file prior to the start of next year’s legislative session. The legislation will reportedly include mobile and online wagering, as well as betting at brick-and-mortar facilities.
The nine-member working group had reportedly agreed to forgo an integrity fee and to tax net revenues as opposed to handle, but a handful of professional sports leagues are looking to change that course.
In September, the National Football League, Major League Baseball, the National Basketball Association, and the PGA Tour all registered to lobby during the 2019 General Assembly and are expected to push for a 1% integrity fee.
Three sports betting bills have been introduced in the state legislature, none of which have passed a committee vote thus far. Senator Morgan McGarvey predicted that the odds of the most recent bill passing when the General Assembly meets next in January are “good.” Whether the outlook will change in the face of the sports leagues’ lobbying efforts is unclear, but it certainly could.
Ohio: Waiting until 2019, with constitutional questions unresolved
Ohio Senate President Larry Obhof said Senate Bill 316, which would provide for legalised sports betting in the state, will be studied in a committee after the mid-term elections in November. Obhof further predicted that the bill would not likely hit the Senate floor until 2019.
Meanwhile, questions have been raised about whether the legislature even has the right to legalise sports betting in Ohio. The state’s constitution prohibits gambling, except under specific circumstances.
Other forms of gambling, such as casinos, were only legalised through a constitutional amendment in 2009, and Senator Obhof suggested that sports betting would need to be amended into the constitution by a vote in a similar manner.
Michigan: Additional legislation is needed
Michigan’s legislature passed a sports betting regulatory bill this year in anticipation of the PASPA repeal. For regulated betting to commence, they must pass a second measure covering some of the finer details, like taxation and (potentially) integrity fees. It’s possible that the second bill will be taken before the end of the year, but only a handful of working days remain on the legislative calendar.
New York: Full-scale sports betting seeking a new champion in 2019
New York’s law authorising sports betting (pending PASPA repeal) went on the books in 2013, and Senate Racing Gaming and Wagering Committee Chairman John Bonacic this year proposed legislation creating rules for sports betting in casinos and online.
The new bill, which would have levied an 8.5% tax on gross revenue, failed to progress, and the legislature adjourned 20 June. The Citizens Budget Commission (CBC), a nonprofit organisation, in September issued a paper advising lawmakers against adopting a policy with high tax rates.
In its paper, titled “Hold Your Bets,” the CBC makes a number of assertions, among them: (i) high tax rates will drive bettors offshore; (ii) gambling taxes based on a percentage of gross gaming revenue are disproportionately paid by poor people; (iii) forecasts for sports betting revenue have been overly ambitious; and (iv) lottery revenues could be impacted negatively by legalised sports betting.
For now, the Gaming Commission is working through “short term” regulations that would authorise sports betting at the four casinos specified in the 2013 law. There is still speculation that a bill authorising full-scale sports betting in New York will be re-introduced in 2019, although Bonacic is leaving office at the end of 2018.
Oregon: Aspirations for Q3 2019
Having launched a mobile app in September, the state’s lottery is looking to expand its mobile gambling operations to sports betting by the third quarter of 2019. Oregon was one of four states exempt from the PASPA prohibition, and the lottery had offered limited sports betting in the past.
To move forward, however, the lottery will need the state’s legislature to approve a taxation scheme, and it is expected that the state’s casinos and tribal gaming operators will need to be appeased. No bills have surfaced as of yet.
MA, MO, KS, IL also hopeful for 2019
Efforts to fast track a sports betting measure in Massachusetts fell short in 2018, but Rep. Joe Wagner believes his initiative to legalise will be up for a vote in early 2019. Gov. Charlie Baker says sports betting will be addressed in January.
Likewise, legislators in both Kansas and Missouri considered multiple sports betting bills in 2018, and their sponsors are hopeful for approval in 2019. Finally, with a new governor and turnover in the legislation in Illinois, the state could be poised for legalisation in within the next year. A hearing scheduled for 17 October could yield a clearer picture.
California: Focusing on 2020 Referendum
In May, Assemblyman Adam Gray introduced a bill to amend the state constitution to authorise laws to regulate sports betting, but the measure failed to find the requisite support to get on the November ballot.
Proponents of sports betting in California now have their sights set on the 2020 ballot.
The state has approved signature collection for the most recent measure, which was introduced in June 2018. To land on the 2020 ballet, the proposal needs to garner 585,407 signatures from registered voters by February 2019.
In addition to sports betting, the measure would also authorise new types of games at card rooms, as well as roulette and craps at tribal casinos.
Connecticut: Lukewarm political support stalls efforts
There is now little hope that legalised sports wagering will arrive in Connecticut in 2018. More than likely, lawmakers will get to the issue when the General Assembly reconvenes in January, at the earliest.
Governor Dannel P. Malloy asked leaders of the four legislative caucuses to gauge support for proceeding with a sports betting bill while he negotiated with the state’s two federally recognised tribes.
However, after hearing back from caucus leaders, Malloy claimed that the Republicans did not want to proceed, and he has since ceased negotiating with the tribes.
Colorado: Gubernatorial election could be a factor
The path to legal sports betting in Colorado will be more straightforward than some had originally expected. After conducting a full legal analysis, Colorado Attorney General Cynthia Coffman has determined that sports betting is not subject to state constitutional restrictions. It is prohibited gambling under the state’s criminal code, however, so the matter is now in the hands of the legislature. The upcoming gubernatorial election could impact sports betting’s place among legislative priorities, as state Treasurer and Republican gubernatorial candidate Walker Stapleton strongly supports exploring a regulatory framework.
Indiana: Studying the issue
Unable to make meaningful moves towards the legalisation of sports betting during the legislative session earlier this year, lawmakers in Indiana have commissioned Las Vegas-based consultancy Eilers & Krejcik to study the issue.
The group will provide lawmakers with financial and policy information that will help them develop sports betting legislation.
Eilers & Krejcik has already begun on an aggressive timeline, and expects to provide some results to Indiana lawmakers as early as this fall.
LA, MD, SC are years away
In Louisiana, Sen. Danny Martiny made multiple efforts to get his sports betting bill on the agenda during special sessions, but Gov. John Bel Edwards would have nothing of it. Martiny said he’ll make another push in 2019 but is not optimistic.
Maryland’s legislature has already passed a bill that would authorise sports betting at the state’s casinos and racetracks, but a referendum is necessary for legalisation to become a reality. This year they failed to pass legislation that would put sports betting on the ballot, which means the earliest it could come up for a vote is 2020.
Despite the introduction of a regulatory bill in South Carolina, the state is likely years away from authorising sports betting, which would require a constitutional amendment to become a reality.
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