July 28th, 2021 Weekly Report
This week in legal sports betting, Louisiana has a new chairman of its Gaming Control Board. In Missouri, that state goes back to the drawing board in an effort to legalize sports betting. New Hampshire turned in some strong sports betting revenue figures in June. Maryland moves one step closer to launching its legal sports betting industry this fall.
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Governor Names New Chairman of the Louisiana Gaming Control Board
As Louisiana moves closer and closer to the launch of legal sports betting, it will have a new chairman at the helm of the state’s Gaming Control Board. Gov. John Bel Edwards appointed Ronnie Johns to the position. Johns will be tasked to lead the board that regulates gaming throughout the state. The former Republican state senator recently resigned from the Legislature to assume this new role.
Johns is from Sulphur, Louisiana which is near Lake Charles as one of the state’s biggest casino gambling areas. He has always been a strong proponent of expanded gaming options in the state. That area was hit hard last year due to the impact of two major hurricanes. One casualty of those storms was the Isle of Capri riverboat casino. That facility was knocked off its moorings in Lake Charles during one of those hurricanes. Plans to reopen have been pushed back to sometime next year.
The 71-year old lawmaker submitted a brief resignation letter ahead of being appointed chairman. He mentioned what an honor it was to serve his senate district for the past nine years. There were two years remaining in his current term. Johns will replace Mike Noel in his new position with the Control Board. Noel stepped down as chairman in June. This followed the two-month legislative session at the Capitol in Baton Rouge.
The Louisiana Gaming Control Board is made up of nine members including the chairman. Its primary task at hand is the successful launch of legal sports betting throughout most of the state.
Through a voter referendum in last November’s general election, 55 of the state’s 64 parishes approved legal sports betting. During this year’s session, the state legislature passed key bills that paved the way for both retail and online sports betting. There are provisions that will also open up legal sports betting through kiosks in bars and restaurants that serve liquor.
The final step in the legalization process falls directly on the Control Board’s shoulders. The rules to regulate the sports betting industry still need to be set. When Noel stepped down as chairman in June, there were concerns that the regulatory process would be delayed. The original timeline for launch was set for early September.
The current timeline for this process is not set in stone. Some state officials believe that legal sports betting may not be operational until sometime next year. There is a positive note for daily fantasy sports (DFS) fans in Louisiana. The state approved DraftKings for its first DFS license on July 15. In-state players will now have access to DraftKings’ online DFS ahead of the upcoming football season.
In November of 2018, 47 of the state’s parishes voted in favor of DFS. This includes the six biggest population centers in the state such as Baton Rouge and New Orleans.
In other state legislative news, lawmakers approved a new naming rights deal for the New Orleans Superdome. The current deal with Mercedes-Benz expires at the end of this month. The new sponsor will be Caesars Entertainment. The terms of the new deal with the NFL’s New Orleans Saints are still being finalized.
The state’s Joint Legislative Committee on the Budget revealed that the new deal is in the neighborhood of $138 million through 2041. Once everything is officially signed, sealed and delivered, the Saints’ home stadium will be known as Caesars Superdome.
New Missouri Sports Betting Bill Planned for Early 2022
State Senator Denny Hoskins will renew his efforts to bring legal sports betting to Missouri in early 2022. This will be part of an “all-inclusive” gaming bill. In an interview with local media, his plans include a pre-filing of this new bill in December of this year. Hoskins remains committed to the effort. He believes that the legal sports betting industry could generate as much as $20 million in state revenue.
Efforts to pass legislation legalizing sports betting came up short earlier this year. One of the main issues was the legalization of video lottery terminals (VLT). This was tied to the sports betting bill and it met strong opposition from Missouri’s casino industry. Hoskins is not backing down on his efforts to legalize VLTs as well. He believes they could generate as much as $250 million annually to support the state’s primary educational system.
Another issue at hand is Senate President Pro Tempore Dave Schatz. He has publicly voiced his opposition to legalizing VLTs in the state. Other lawmakers have suggested that the issue of legalizing sports betting should be approached as a stand-alone issue. Missouri will definitely be one state to watch in 2022 on the legal sports betting legislative front.
New Hampshire Increases Sports Betting Revenue in June
One common trend among states offering legal sports betting is increased revenue for operators during the slower summer months. In many of these cases, the total betting handle decreased from the previous month. However, that is to be expected during the slower summer months. The biggest takeaway is improved profitability of the operators themselves. Most legal sportsbooks are making more money on a smaller handle. This also relates to promotional spending to attract new customers. During the slower summer months, the books tend to pull back on their introductory promotional offers.
New Hampshire was a case in point during the month of June. The total sports betting handle for the month was $31.1 million according to state gaming records. This reflects a 6.6% decrease from the month of May ($33.3 million). However, gross revenue in June from that sports betting volume was $3.9 million. This is a 24.2% increase over May of this year. The state’s share of that revenue was $1.8 million which is 25.4% higher than the previous month.
DraftKings is the lone sports betting operator in the state of New Hampshire. The company also pays a premium for that privilege. To hold this monopoly, DraftKings’ tax rate on sports betting revenue is 51%.
New Hampshire is far from being a major market in the legal US sports betting industry. The state’s biggest month to date as far as the monthly betting handle was this past January. That is when the total betting volume reached $59.8 million.
Maryland Moves One Step Closer to Legal Sports Betting Launch
Finally, it appears that Maryland’s legal sports betting industry will be up and running sometime this fall. Recently, a set of regulations governing the industry has been approved by the Maryland Lottery and Gaming Control Board. State regulators have been working through the process over the past few months.
The next step is a full review by the Maryland General Assembly Joint Committee on Administrative, Executive and Legislative Review. Once this process is complete, the Maryland Register will publish an official set of rules for public review. The public review process is expected to take 30 days. Potential sports betting operators are still waiting for their application submission guidelines. These will be provided by the Sports Wagering Application Review Commission.
The regulatory wording for Maryland’s legal sports betting platform calls for 40 retail licenses. There will also be as many as 60 online mobile betting licenses available.
Given the large number of available licenses in the state, there should be no shortage of operators. Applications for a retail license will cost between $50,000 and $2 million depending on the tier. Potential candidates will also have to come up with $75,000 to $6 million in the form of a bond. Application fees for a mobile license will range from $500,000 up to $1.5 million. Each will require a $1.5 million bond. The tax rate on legal sports betting in the state of Maryland has been set at 15%.
There is still quite a bit of work to be done. This means that a launch in time for the start of the new football season in early September is unlikely. A realistic timeframe for launch would be halfway through the 2021 NFL regular season.
Written by Dave Schwab, our US Sports Betting Industry Expert. You can read more about our author's expertise here.