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The possibility of the US Supreme Court striking down the federal prohibition on sports betting has resulted in a tidal wave of preemptive legislation across the country.
State legislatures are in many cases trying to pass sports betting legislation ahead of the Supreme Court decision. But the rush (a fear of missing out) bears a striking resemblance to how daily fantasy sports (DFS) was handled in 2016 and 2017, when high-priced lobbyists regaled state lawmakers with tales of DFS being a modern day El Dorado.
DFS was the proverbial bright shiny object, and now state lawmakers are being distracted by a new shiny object: sports betting. And in their haste, states are overlooking the real opportunity: online gambling.
Online gambling advocates frustratingly sat by as industry-friendly DFS bills were passed in nearly 20 states, while just a single state passed legislation legalizing online poker and casino games — Pennsylvania.
In 2018, it’s sports betting legislation that is pushing online gambling to the backburner.
But maybe that’s changing.
At least one lawmaker in Missouri is having a difficult time rationalizing why the state should legalize online sports betting while not even considering legalizing other forms of online gambling.
During a sports betting hearing on Wednesday, Missouri Rep. Peter Merideth had the following exchange with Mike Winter, a lobbyist for the Missouri Gaming Association, representing the state’s 13 casinos.
Rep. Merideth: “We’re having this conversation about sports betting, so I’m wondering should we also be having this conversation about mobile gambling, period? Is there a reason that we should be treating sports gambling — which is currently more restricted than other gambling — and rather than just catching it up to other gambling, we’re actually talking about even taking it even to less restricted, essentially, than regular gambling. Is that right?”
Winter: “No, I think that’s fair.”
Rep. Merideth: “It’s like leapfrogging. Okay, I find that interesting. Do you have any reason to think that we should be more okay with sports gambling than we are with other gambling.”
Winter: “No, probably not. Obviously, the proper safeguards have to be in place regardless of what you’re talking about.”
Rep. Merideth: “I’m just wondering if we should actually be having a bigger conversation about mobile gambling here, rather than it just being about sports.”
This is a question every state lawmaker should be asking during these hearings.
First, legalizing online gaming is already an option for states — four states have already done so — and doesn’t rely on a yet-to-be-issued favorable ruling from the Supreme Court.
Further, estimates in Connecticut have legal online casino and poker generating more than twice as much revenue for the state as legal sports betting.
According to written testimony submitted by Mohegan Sun, sports betting would generate about $40 million in revenue for the state over a five-year period. Over the same five year period, Mohegan Sun estimates online gambling would generate $87 million.
Foxwoods provided similar estimates to the state, as have outside analysts and firms.
Bottom line: legal online gambling is going to put more money in a state’s coffers than sports betting.
Despite the state’s two gaming tribes supporting legal online gambling, the Connecticut legislature is myopically focused on sports betting. That’s led to Foxwoods and Mohegan Sun basically pleading with lawmakers to prioritize online gambling.
Seth Young, the Executive Director of Online Gaming at Foxwoods Resort Casino, didn’t mince words in written testimony he submitted last week:
“We appreciate that there is significant interest in sports gambling within the state of Connecticut… I would like to clarify some points about the sports gambling market – including the perceived financial opportunity – but first I would like to address iGaming, which is a more lucrative opportunity for the state than sports gambling.
“As we see it, the strongest opportunity for the state is in legalizing statewide iGaming, another activity that is currently operating for Connecticut residents in the black market today.”
Just as it should have if it was considering legalizing DFS, any state considering legalizing sports betting, particularly online or mobile sports betting, should also consider legalizing online gambling at the same time.
Online gambling and sports betting would fall under the purview of the same regulatory body.
Online sports betting and online poker/casino would require largely overlapping regulations, including identity verification and geolocation.
Further, much like DFS, the reasons for legalizing sports betting (including online sports betting) are the same reasons states should legalize online gambling.
Sports betting might be the new shiny object, but it’s online gambling that provides the real opportunity for states. And it’s time for more lawmakers to recognize the potential.