Pennsylvania has legalized online sports betting with a change in federal law already

2018 Trend To Watch: Will Sports Betting Pull Legal Online Gambling Along With It?

Sports betting pulls igaming
For the moment, Nevada is the only state with both online poker and fully legal sports betting. That could change the moment the US Supreme Court renders a verdict in Christie vs. NCAA, however.

The New Jersey sports betting case hinges on its ability to legalize sports betting in its own state. Online gambling has been legal there for several years, but federal law has so far prohibited the state from enacting a sports betting law.

States have always had the ability to legalize online gambling, but only four have acted on it so far. It is a young industry (at least in the US), and lawmakers are still generally uneducated about the concepts and technologies involved. The overall appetite for online gambling remains somewhat low.

Sports betting, on the other hand, has been around since the beginning of sports. Nevada has been doing it in a regulated way for decades, and betting is a thread that ties the sporting world together worldwide. The potential market would provide a boon to casinos and other land-based gaming interests both in direct revenue and ancillary benefits.

As states consider issues surrounding gaming, sports betting seems to be in the driver’s seat for the moment. But there is reason to believe the two things can progress in tandem, at least in some states.

Online poker in the passenger seat

If Christie comes down in New Jersey’s favor, iGaming legislation will likely continue to take a backseat to sports betting. But sports betting laws could help facilitate online gambling in some places, too.

David Rebuck oversees the New Jersey Division of Gaming Enforcement, and he thinks the two issues will follow each other around from state to state.

In an interview with The Associated Press, Rebuck said that his state’s case could open the floodgates. “If we win sports wagering, online gaming will go to every state that adopts sports betting,” he said. “As soon as sports wagering is legalized, online gambling will follow right behind it.”

That’s an optimistic view of the process, but the logic isn’t invalid. If a state passes a sports betting law, particularly an online sports betting law, there’s little practical reason not to expand that to casino and poker, too.

Of course, logic doesn’t always come into play in making laws.

Sports betting driving the bus

The momentum is with sports betting, with more than a dozen states entering the conversation in 2017. Even more than that legalized daily fantasy sports, which could be seen as a gateway to sports betting in some places.

Pennsylvania was one of them, the only one to pass comprehensive online gambling legislation during the year. The new package includes pretty much everything under the sun — online poker and casino, DFS, and live and online sports betting. The state’s whole-hog approach proves it can be done. But most states are choosing to bite off one piece at a time.

New York, Connecticut and Mississippi all have some form of a sports betting law on the books, and they are candidates for iGaming, too. New York has been involved in the discussions for years, and it recently launched an online raffle. All three states have land-based casino operations that could support the framework for online play.

Kentucky is one of the most recent states to join the sports betting conversation. The country’s horse racing capital is considering two bills that would pave the way for both brick-and-mortar casinos and sports betting. Again, online poker could follow, but it looks like the focus is on land-based gambling at the outset.

Iowa, Massachusetts and Oklahoma are among the other states set to consider legalized sports betting in the new year.

Some states still pushing iGaming first

Sports betting seems to have leapfrogged online gambling on the list of lawmakers’ priorities. But some are still pushing iGaming at the front.

Michigan Rep. Brandt Iden has a comprehensive gaming bill that is making progress through the legislature. It was initially conceived around iGaming, specifically, but it has been expanded since introduction. Online sports betting language appeared in the most recent version:

The division may permit an internet gaming licensee to conduct internet wagering under this act on any amateur or professional sporting event or contest, if that internet wagering is not prohibited by federal law.

There is no mention of land-based sports betting, despite the fact that the state has both commercial and tribal casinos. Iden, however, has indicated that he hears the voices of casino owners who wish to open a sportsbook at their properties.

At this point, it’s tough to tell which pieces of the legislation will be included in the final version. Although sports betting is a new addition, the online gambling language had been making progress on its own. And Iden seems confident that one will follow the other, if nothing else.

I think this is a good first step in that direction, but we have to get this component done first. We’ll make sure we can shepherd through and get to the governor’s desk an agreement to do online gaming, and I think from there the next step will be sports gaming.

Gambling is fine, but ‘online’ remains a hurdle

Although sports betting and online gambling could go hand-in-hand, lawmakers still take issue with the online component in some states. The opposition stems from a general lack of understanding about the technological and practical implications of online gambling.

Legislators are still hung up on some of the same concerns that have been debunked in the past. Those include underage gambling and cannibalization of land-based casino revenue. (The technology exists to effectively stop the former, while the online gambling has been proven to have the opposite effect on the latter.)

In addition, stakeholders’ interests must be considered. In some states, tribal gaming compacts create an extra set of rules to navigate. The same can be said for land-based casino operators. Many of them favor sports betting but might oppose or be lukewarm on online gambling. Some states even have constitutional language which would need to be amended to allow for online casinos and poker.

In-person gambling, though, is becoming more widely accepted. Casinos now dot the map from coast to coast, and more are on the way in 2018. Some of them, even outside of Nevada, may end up with sportsbooks under their roofs if things shake out the right way.

For many states, the path to legalized sports betting — and iGaming — will come via those land-based casinos. How quickly — and if — sports betting helps the online gambling discussion will start to shake out in the new year.

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Eric Ramsey
- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.