Due to the COVID-19 pandemic wreaking havoc on the country, more places in the United States find themselves with dwindling budgets and looking for new tax revenue money wherever it can be found.
While all of the major American sports are still on hiatus, European soccer, Korean Baseball, and NASCAR have all gotten back to play. This gives us the illusion that we’re close to seeing everything back to normal, or what is the new normal. PGA Tour golf resumes play in two weeks, and the NHL released its return-to-play plan last weekend.
“States are facing unprecedented financial challenges,” said Matt King, CEO of FanDuel Group. “We are firm believers that mobile sports betting and online gaming legislation will be the type of commonsense legislation that states will look to when legislatures return.”
The virus “will accelerate the expansion of sports betting and online casinos in the next 12 to 24 months,” said Chris Krafcik, managing director with Eilers & Krejcik Gaming. “Both activities provide states, whose economies have been massively disrupted by the outbreak, the opportunity to capture new revenue immediately in the form of upfront license fees, and over time through taxes.”
It is interesting to note that sports betting hasn’t been that big of a revenue grab for some states – maybe only a fraction of one percent. After all, some states don’t have mobile betting, and that has really shown to be the preferred method for most bettors.
Legal But Lacking
In total, 18 U.S. states have sports betting, but only four of them have internet gambling with online casino games like blackjack and roulette. Additionally, states like Tennessee and Virginia have been approved but haven’t launched yet.
North Carolina only has two tribal casinos allowed to accept wagers and is also considering a bill to allow it statewide, while Oklahoma and Washington are in similar positions.
Louisiana, Massachusetts, and Ohio are all optimistic about getting sports betting legalized within its state borders.
“We should be preparing now — creating regulations, lining up vendors, setting up servers,” said New York state senator Joseph Addabbo Jr., a Democrat. “Let’s get it ready so that when we come back, we don’t miss another Super Bowl.”
Late this week, California talked about adding sports betting to the November agenda. After all, this is a state currently with a $54 billion budget deficit.
Doing It Right
New Jersey is one of the few states with an exceptional online platform to go along with numerous retail locations within its borders. Meanwhile, New York only allows sports betting at four casinos upstate, well away from the five boroughs. There’s a good chance that not everyone would be anxious to return to the casinos right away – if at all.
“If social distancing safeguards remain in place, it is possible that some gamblers would prefer to play from home rather than going into a casino,” said David Schwartz, a gambling historian with the University of Nevada Las Vegas.
Somehow, New York has managed to totally screw this all up from the get-go. Neighboring New Jersey is taking tons of money away from New York, considering 25 percent of all Garden State bets are coming from the Empire State.
Yaniv Sherman, head of commercial development for 888 Holdings, believes the virus is expediting trends that were already moving before the virus struck. All this time, there was a big need for states without online sports betting to start moving in that direction.
“The virus has highlighted the need for revenue diversification,” he said. “The future is around online growth, and it’s right now, not in five or 10 years. We hope to get additional states on board.”
