Sports Betting Expert
October 8, 2021 Chris Altman
US Sports Betting Industry Expert
CALIFORNIA MAY ATTEMPT TO LEGALIZE BETTING IN 2022
2022 will see a general election take place in California. When voters do take to the polls, there is every indication that there will be a ballot initiative to legalize online sports betting in the Golden State.
As a matter of fact, there’s already been one initiative filed to appear on the 2022 ballot allowing for tribal interests to offer legal betting in California. There’s another initiative that’s being pushed by local cardrooms for that same authority to offer legal betting.
The third prong of this sportsbook-hopeful trident comes in the form of a lobbying group called “Californians for Solutions to Homelessness and Mental Health Support”, looking to have commercial interests like sporting venues get in on the deal.
If legalized, California could represent the largest betting market in the US. Just as a function of population alone, California could potentially unseat New Jersey as the state bringing in the most gambling revenue per annum.
There’s a lot of talk about California taxing revenues from sports betting in addition to charging a cool $100 million for an operator to be licensed, which is a factor of one thousand times more for a CA license than it costs in the largest market, NJ (licenses cost $100,000).
Sports betting will likely be an easy sell for Californians, as the state has some of the most well-known sports franchises in the country and tends to be on the front lines when federal law and states’ rights issues are in question.
OHIO LOOKS AT ESPORTS BETTING PUSH FOR MORE REVENUE
This year, we saw the Ohio legislature narrowly miss their window to legalize and regulate online sports betting. Those efforts didn’t get off the ground, but local interest groups are still pushing forward with their requests for a regulated and safe online betting market.
One such interest group, the Esports Entertainment Group, has partnered with the Cleveland Cavaliers to push for a safe online sports betting market in the Buckeye State, and it seems like lawmakers are listening: for example, State Senator Kirk Schuring has stated that he intends to continue to convince his colleagues to get behind a bill offering 40 sportsbook licenses with no cap on online partnerships.
Should Schuring get his way, Ohio casinos would be able to partner with any number of sportsbooks to offer online betting platforms. However, there’s a major stopping block in the way, the most common complicating factor in everything from restaurant choices to international politics: money.
Ohio casinos are taxed at a staggering rate of 33%, which is a far cry from the 5-11% we see being taken from gambling revenues in other states. (The situation is better than in New York, where legislators are proposing a 50% tax rate on sports betting revenues.) Should that tax rate carry over to sports betting providers, the Ohio market will not be an attractive one for an operator to enter, whenever it finally goes live.
CONNECTICUT RETAIL BETTING GOES LIVE, ONLINE DELAYED
The expected launch date for Connecticut online sports betting came and went on October 7th, 2021 without any providers bringing their services online. Unfortunately, legislators and CT Lottery officials were incorrect when they said they were ready to go live by this week, and the reason boils down to the way the federal government approves changes to state laws.
Essentially, when a state government and a federally-recognized tribal entity want to make changes to their “compact”: an agreement dictating the relationship between the state government and the autonomous tribes within said state- they have to get approval from the federal government.
These compacts include agreements on who has jurisdiction over sports betting and other forms of legal gambling, and when the changes (amendments) are agreed upon by the US Department of the Interior, they are published in the Federal Register. Those changes, it was assumed by the CT Lottery and officials responsible for launching sports betting in the Constitution State, were accepted and thus they could proceed with mobile betting on the 7th.
Not so- the changes were published too late, meaning that the MOU (“memorandum of understanding”, a formal agreement to conduct business in a certain way) was not live in time for CT sports betting to go live on mobile apps and websites by the 7th. Kaitlyn Krasselt, communications director for the Connecticut Department of Consumer Protection, does not anticipate “a lengthy delay”. Bets may go live as early as the week of October 18th.
CANADA SPORTS EXPANSION COULD CREATE HUGE MARKET
Every individual Canadian province now has access to a legal, regulated sportsbook offering bets on single events. Now mirroring the betting ability of the US market, Canadian bettors are expected to flock to these legal betting sites, and in no province will that be more apparent than in Canada’s most populous: Ontario.
Revenue projections indicate that sports betting countrywide could pull in a solid $25 billion USD per year in handle, equating to around $50 million in tax benefits for the country.
Compare this to New Jersey’s revenue from January 2020, and you’ll see the numbers are about the same- New Jersey bettors spend in one month what all of Canada will expect to take in over the course of a year.
It will take some time for Canada to compete with the US in terms of betting handle and tax revenue, but there’s still a possibility that Canada’s legalization could make Ontario one of the largest legal sports betting markets in North America.
MARYLAND LOOKS TO FINALIZE SPORTS BETTING PACKAGE SOON
Maryland legislators set up one of the most ambitious sports betting packages to date. With an open cap on available licenses, the market is set to be one of the most competitive in the country. There are a few caveats, but for the most part, we’re expecting a wide variety of sportsbooks to be available in Maryland soon.
There are two governing bodies with controlling interest in MD’s sports betting package: the Sports Wagering Application Review Commission (SWARC), and the Maryland Lottery and Gaming Control Agency (MLGCA). Director of the latter, John Martin, anticipates 17 operators being ready to provide legal online sports betting services to eligible users in 2021.
One reason why the MLGCA hasn’t started approving licenses yet refers to the previously mentioned caveat: some sportsbooks will likely be hesitant to enter the Maryland market because there is a limit placed on the dollar amount that sportsbooks can use for promotional offers.
This means that, in Maryland, sportsbooks will not be able to offer the same competitive welcome offers that they do in other states. Interested parties are attempting to have the MLGCA lift this limitation so that they can market themselves most effectively to new users. If they successfully lobby this change, Maryland sports betting will likely be delayed. If not, they’re likely to go live with betting sometime before the end of the year.
Written by Chris Altman, our US Sports Betting Industry Expert. You can read more about our author’s expertise here.