If you want to know why so many states have legalized sports betting and so few have authorized iGaming, some comments in the Georgia General Assembly this week could help explain.
Sen. Bill Cowsert was testifying before the Higher Education Committee of the Georgia House of Representatives about Senate Resolution 579, a proposed constitutional amendment to allow sports betting.
Cowsert had been downplaying the tax revenue the state could realize from Georgia sports betting, putting it in the ballpark of around $50 million per year. He was then essentially asked why they should legalize sports betting if the returns were so relatively light and the risks of problem gambling so present.
"Constituents want it," Cowsert said. "All the sports teams want it. A whole bunch of other states are doing this because it is so popular in American culture.”
Rep. Marcus Wiedower noted later in the meeting he had sponsored sports betting-related legislation in 2023, which prompted emails from the public.
“I've gotten more for [sports betting] than I have against it,” Wiedower said. “That's just a fact.”
Just not there yet
Similar comments have no doubt been made in various other U.S. legislatures. Constituents have pushed their representatives for sports betting, and those representatives fought for it on their behalf.
And that, to me anyway, is a difference between the success of sports betting and the success of iGaming. Voters have supported sports betting but have not shown the same support, at least publicly, for online casino gambling. Without that support, it could remain an uphill climb for iGaming bills in any state legislature.
The public understood sports betting and were supportive, said Shawn Fluharty, a West Virginia lawmaker and the president of the National Council of Legislators from Gaming States (NCLGS), during a recent conference. That same understanding and support has yet to solidify for iGaming.
“Politicians react to the public, not the other way around,” Fluharty said during the NEXT iGaming and sports betting summit in New York earlier this month. “The public's not there yet on iGaming in large part because there’s been no real messaging. The industry hasn’t gone out to the public and garnered their support. They’ve gone straight to the legislature, and it’s not very receptive.”
Wrote down some thoughts yesterday about where iGaming growth could actually come from this year (albeit with some of those thoughts borrowed from @OPReport and others): https://t.co/Ko3Nbf7REC@Covers
— Geoff Zochodne (@GeoffZochodne) March 19, 2024
The online gambling industry managed to gather support from the public for sports betting and, a little further back, for poker. Notably, the Poker Players Alliance fought for its members in the aughts, although it wasn’t enough to stave off a federal crackdown on the industry.
Also missing from the iGaming equation are entities like professional sports teams and leagues.
The leagues, for example, were persuasive opponents in the fight over sports betting in the U.S. But after the Supreme Court struck down the law standing in the way of that expansion, the leagues became some of the most persuasive supporters in state legislatures.
It’s tough to think of an iGaming equivalent to an NFL team. At the moment, the parties involved all have a lot of skin in the game, whether they are online gambling operators, brick-and-mortar casino companies, or labor unions concerned about the employment of their members.
Funnily enough, though, the National Hockey League recently announced a renewal of its U.S. partnership with Caesars Entertainment Inc. with some iGaming-related benefits. The new deal provides the digital arm of Caesars “with access to League-owned intellectual property to build and promote NHL-branded casino games for its online casino platforms in North America, including the recently launched Caesars Palace Online Casino.”
Maybe the NHL will someday offer a robust argument in favor of iGaming. Still, it seems unlikely. Even if a league did push for iGaming, it may wind up confusing lawmakers more than convincing them; why would professional sports franchises care about online blackjack?
A victim of success
Overall expectations might be warped somewhat by the success of sports betting. Since 2018, more than 30 states plus the District of Columbia have opted to authorize some form of event wagering within their borders. And, while not everyone has been happy with how all that regulation and legislation has looked, it’s happened.
Some of the arguments for legalizing sports betting have even been reused for iGaming, such as that everybody’s doing it and, you, states, just aren’t realizing any revenue. Yet the math alone is proof those points just aren’t landing with the same effectiveness, as only seven states have legalized and launched iGaming. Only four of those — Michigan, New Jersey, Pennsylvania, and West Virginia — have markets where two or more operators can compete for business.
Cui bono?
In Maryland, where iGaming legalization is still possible this year (although that seems unlikely), the industry was put on its back foot by a variety of allegations, such as that thousands of jobs will be lost if online casino gambling is allowed. It’s hard for lawmakers to ignore that kind of rhetoric.
Still, it may be that states are ultimately won over by the potential tax revenue iGaming could generate. Other arguments can be made as well, such as the jobs that the popular live-dealer table games provide.
"It really boils down to one issue when you're dealing with expansion to other states, and that is the question: Who will benefit and profit from operating internet gaming?” said David Rebuck, the former director of New Jersey’s Division of Gaming Enforcement, during the NEXT summit.
Yet simply likening iGaming to sports betting is not going to cut it. The voters know the difference, and legislators do as well.
“This is not the same,” Fluharty said at the NEXT conference.
