Sports betting, two years later
Two years ago today, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), which had prevented states from creating their own sports betting regulations.
Where things stand: 24 months later, 18 states and counting have legalized it, launching an explosive new industry that touches sports, media, technology and more (though the pandemic has slowed growth in what was set to be a big year).
- It all started in New Jersey, which has since nearly caught up to Nevada in terms of revenue generated (see above). And thanks to a favorable tax rate, New Jersey ($62.6 million) has earned significantly more than both Pennsylvania ($43.6 million) and Nevada ($39.3 million) in taxes.
- If there's one early trend whose veracity we can be confident about, it's that mobile betting is the future of the industry. Do you really think New Jersey (population 8.8 million) would out-earn New York (population 19.5 million) if the latter let people bet on their phones?
What they're saying: Most states allow casinos to operate freely, taxing them as they would any business. But a handful run their casinos at the state level under a revenue-sharing model, which Dustin Gouker of Legal Sports Report tells me is a shortsighted strategy:
"The states with more open markets (N.J., Pennsylvania, Indiana) have outperformed those without them (Oregon, Rhode Island). It's too early to make calls beyond a shadow of a doubt, but both Oregon and Rhode Island would clearly be doing better if they took less money with an open system."
Looking ahead: Former American Gaming Association executive Sara Slane, who now advises companies in the space, lays out five key trends to watch moving forward.
- The line between sports and casinos will blur as the two industries fight to capture discretionary dollars. Think: The sportsbook inside Washington, D.C.'s Capital One Arena.
- Mobile and retail operators presenting a unified front. "Expect to see a shared wallet for online gaming tied back to retail, more cashless payment acceptance on the casino floor, and rewards and comps for online play."
- Optimizing the "watch and bet" experience. Live lines must be set quickly and internet connections can't lag.
- Tech companies will enjoy rapid growth. Even (especially?) during a pandemic, "online sports betting presents an opportunity for innovation in a traditionally anemic industry."
- Gaming regulations will evolve with the times. "Sports betting will move the regulatory process forward to meet consumer demands."
The bottom line: So much has changed in just two years, but in reality, it's only just begun.
Go deeper: Coronavirus sends sports betting scrambling