Thoughts on the remaining 2018 U.S. Regulatory Calendar
We are now almost 90 days since the repeal of PASPA in the United States, and we are starting to gain a sense of what the market may turn out to be in many states. As you well know, especially if you follow our news section, there have been a number of sportsbooks that have opened already, and even more partnership deals for future launches. What remains to be seen is if any other states are going to vote in favor of sports gambling bills.
If you are curious as to why there has been a slowdown in announcements of new legislation, the answer is pretty simple. First, most state governments only sits for part of the year, and in the case of the PASPA ruling, the majority of states that were debating or introducing bills were set to recess only days after the announcement. This left many bills, like the one in New York, without the votes to pass, and shelved for the time being. Throw a mid-term election into the mix, and there is even more of a chance for a slowdown, especially in states whose Governors are being voted upon.
This does not mean that there wont be any more states to launch before the end of the year. We recently saw Mississippi launch a few sportsbooks, and West Virginia will do so in short order. The rest of the states are really in a position to go one of two ways, so let’s look at these options in a little more detail.
Scenario 1: Special Session
When a government doesn’t sit for months at a time, you can imagine that a lot of bills can go stale. This can be particularly tough for bill that have great importance to the well-being of a state. However, even though the government is closed, there is a way to bring a bill to life during this slow period. If the Governor can be convinced that a bill is too important to wait until the next session (typically at the start of a calendar year), and it seems like they are able to pass the bill with no issues, then they can call the government officials back for a Special Session.
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In a Special Session, members of the house and senate are provided with a summary of a bill upon which they are to vote, and there is a very short discussion period before the vote takes place. A Special Session can pass one or more bills. There are many states that are considering a Special Session of government to address the sports betting law. There is some urgency to get a bill passed, as with every day a player could be marketed to by a sportsbook in a neighboring state. Also, the tax revenue that could be generated by betting on NFL football (which composes well over half the wagers made each year in the U.S.) is significant, so getting it on the books can only serve to help states. Time will tell if any state can be fully convinced to call a special session, but if we were betting on it…we’d set the line of the total number of sessions called in 2018 at 0.5.
Scenario 2: Stand Pat
Many states, especially the ones that do not border a state with regulated gaming, could also decide not to do anything this year, and opt to wait for the new session in 2019. This means that players in those states likely wouldn’t see regulated sportsbooks until the summer of 2019 at the earliest. While this may be disappointing to some players, there is an argument to be made for holding off rather than rushing a bill into law before the fall. There is a lot at stake for the operators and the state, so getting it right the first time is crucial to the long-term prosperity of each state’s sports betting industry.
We think it is very likely that many states will choose to do nothing, especially in light of the upcoming mid-term elections. Many state governments may have a very different look to them come November, so there may be a reason to hold off rushing to any decisions about the details of a sports betting bill.
Overall, we aren’t sure which scenario is better for a state. One thing we do know is this – the states that wait will lose out on potential tax revenue but will have the benefit of watching the early adopters and taking the best practices back to their own jurisdictions. It is likely that most states will have passed laws by the end of 2019 if the last couple of months are any indication.
Related US Gambling Articles:
- Coronavirus Likely Ruining Chances of Sports Betting in Missouri
- Connecticut can’t figure out sports betting for 2018
- March 2020 Sports Betting Legislation Update
- Online Poker and Mobile Sports Betting Remain Elusive in New York
- Kentucky Unlikely To Legalize Sports Betting In 2020
- Sports Betting Efforts Back on Track in North Carolina