Could more US states legalise online gambling?
Since the COVID-19 crisis began to spiral out of control back in March, there has been significant discussion about the effect it could have on the United States economy. Thousands have had their livelihoods ruined by the pandemic, meaning tax revenues across the country have decreased significantly.
To cover the shortfall, many states may consider legalising gambling. But just how realistic is this prospect? Can more citizens really expect to enjoy legal, online gaming on this website and others in the near future?
In which states is gambling currently legal?
Before we examine whether the coronavirus could lead to more states legalising gambling, we should first give a brief overview of its current status under United States law. Like with most US legislation, the situation is complex. Gambling is technically legal under federal law, however each state regulates the industry differently. Nevada and Louisiana are the only places in which casinos are permitted state-wide. Most other members of the union restrict the practice to specific areas or do not allow it at all.
Examples include Atlantic City, New Jersey and Tunica, Mississippi. The legality of sports betting was expanding before the pandemic hit and following a landmark 2018 Supreme Court case, any state can legalise the practice if it wishes. The only two states in which gambling in any form is not permitted are Hawaii and Utah. Online sportsbooks like FanDuel, DraftKings and BetMGM have seen huge growth in popularity in states like Pennslyvania where online sports betting has been legal for just over 12 months.
Why could coronavirus change things?
The economic impact of the virus has left many states with budget deficits and lawmakers are looking for new forms of revenue wherever they can find them. One such money-spinner that could be considered in gambling. Sports betting and virtual casinos are the most likely to be legalised, according to gambling legislation expert Chris Krafcik of Eilers & Krejcik Gaming.[The virus] “will accelerate the expansion of sports betting and online casinos in the next 12 to 24 months,” Krafcik said recently (via wbez). “Both activities provide states, whose economies have been massively disrupted by the outbreak, the opportunity to capture new revenue immediately in the form of upfront license fees, and over time through taxes.”
Most major sports betting markets have been closed since the beginning of the crisis but things are finally starting up again. The NBA and NFL are formulating plans to return, NASCAR is back underway and European football is set to resume later this month – or already has in the case of the German Bundesliga.
Krafcik is not the only industry expert predicting a boom in gambling legalization as a result of coronavirus. Penn National Gaming CEO Jay Snowden is similarly optimistic, while DraftKings boss Jason Robins is also expecting a radical change. “We think that this legalization process that is happening at the state level stands to accelerate, and we really think we’ll benefit from that because we operate in more states than any gaming company in the world,” Snowden said last month (via CNBC).
While legalization would provide a welcome boost to tax revenue for many states, it would not solve their deficits entirely. Last year, The Associated Press reported that taxes on sports betting would cover just 1% of most states’ budgets – and even less if they failed to make their projections. Rhode Island experienced a gambling shortfall last year with Gov. Gina Raimondo conceding that the budget would have to be readjusted due to betting revenues not being as high as expected.
What states might be next to legalise gambling?
Louisiana, Massachusetts, and Ohio could loosen gambling restrictions as early as this year. The former is close to approving a November referendum on sports betting and the latter passed a bill last month that moved itself one step closer to full-scale sports betting legalization. California looks set to follow suit with a similar motion tabled by the state legislature back in May, while New York State Senator Joseph Addabbo is also pushing for deregulation. Others could join them over the next few years as the full, economic impact of coronavirus is realised.
There are a lot of European operators like Unibet, and William Hill who are looking to capitalize on the legalisation of sports betting in the states. They are already active in a handful of areas and will be branching out and setting up shop in more states over the coming months and years.
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