In May 2018, the Supreme Court allowed the states to decide if sports gambling would be legal. In just over 12 months, we now have 16 states where people can bet on sports or will in the next few months.
Background
If you check out my post from last year, you will get some background on this legislation.
Plus, Steve “Action” Roberts and I discussed this move on our Side Action Podcast, especially in Episode 1: https://podcasts.apple.com/us/podcast/side-action-podcast/id1433855665?i=1000418340358
To summarize, in the early 1990s, there was a ban on sports gambling for fear the games would lack integrity.
Why the Change?
There are 3 main reasons this is happening:
- States need the cash!! – Let’s face it a lot of states are completely broke. Illinois being one of them. Legalizing Weed in CO has really helped that state, so gambling along with other changes are moves to generate more revenue.
- Technology makes Gambling Easier – Before, you had to have a bookie at a bar or barber shop to get a bet in. Now, there are a variety of ways to do it, and States again want to capture that revenue.
- Integrity is A bit Overstated – Professional players for sure make so much money that the likelihood of “throwing a game” is really low. College players may be susceptible, see the Illinois rules below, but in reality the big casinos in Vegas do not want a fix. They can sniff it out when they see certain line movement. As such, the gambling market is actually fairly efficient in the sense that if something out of the ordinary happens, the casinos and gaming companies will be the first in line to yell at the regulators. So, in the end, making sports gambling legal and out in the open will actually not affect integrity of the game, but could actually increase it, in theory.
Current States with Sports Gambling
Here is a tracker, but they don’t have the Illinois law as a Green state yet:
States that are Legal and Operating (8)
- Nevada – they have been legal for years
- Delaware – as of June 5, 2018
- New Jersey – really the main state that pushed the legislation – June 14, 2018
- Mississippi – as of August 1, 2018
- West Virginia – August 30, 2018
- New Mexico – Legal at Santa Ana Star Casino Only – October 16, 2018
- Pennsylvania – November 16, 2018
- Rhode Island – November 26, 2018
States that are Legal but Need Regulations to Operate (8)
- Montana – Passed May 3, 2019
- Indiana – Passed May 8, 2019
- Iowa – Passed May 13, 2019
- Tennessee – Passed in May 2019
- Illinois – Signed by Governor, Monday, June 3rd!!
- Arkansas – Voted in November 2018 – still going through regulations
- Oregon – Should launch via the Oregon Lottery
- New York – Still working through legislation to regulate under existing law of 2013
Sports Gambling in Illinois
Here is the article for reference and the actual bill.
The Bill itself: http://www.ilga.gov/legislation/101/SB/10100SB0690ham003.htm
Basics:
- Existing Gambling venues can accept bets – That means existing casinos and race tracks.
- Large sports stadiums and surrounding areas – Large arenas of 17,000 or more can set up their own sports books and have exclusivity within 5 blocks of the venue – Soldier Field, Wrigley Field, Guaranteed Rate Stadium (Comiskey Park) and the United Center. This is the European model with kiosks in stadium or around the venues.
- Prohibition on College Bets – The bill does not allow bets to be accepted on Illinois schools – U of I, DePaul, Northwestern, etc. Yet, other colleges are ok. This is clearly a move to address the “Integrity” issue mentioned above.
- Online/Apps – Individual operators can set up apps to accept bets with their physical sports books. Companies like FanDuel and DraftKings cannot participate for the first 18 months unless they partner with the local operator. This is clearly a political move to help the local casinos and keep the national brands back. I do wonder if one of those firms will try to be the new Chicago based casino, though (which is a separate provision in the bill).
- Initial Fees – An operator/sports book/casino will need to pay a hefty $20MM fee or more to be allowed to accept bets, which gives them license for 4 years. This way no mom and pop shop can be set up to accept bets.
- Ongoing Taxes – Illinois will collect 15% of the revenues gained via sports gambling
A Few Comments:
As Action and I have discussed on the Side Action podcast for months, the spread of sports gambling to almost all the states is inevitable. The legislation change last year opened the door wide open, and states are jumping in. It is estimated at that by the end of 2020 – 35 states will have sports gambling. So, this is no surprise. In fact, I’m surprised these last few states waited so long, as the big betting season – NFL and College Football is only 3 months or so away. It is unlikely Illinois will make it in time, but maybe the surrounding states will.
You may not have noticed, but I sure have with the podcast that sports gambling is becoming part of local and national telecasts. Beyond VSIN (Vegas Sports and Information Network), almost every local show has a sports gambling stand alone show or segment. Sports betting is becoming part of the daily parlance of sports. It’s been this way in Europe and other parts of the world.
The only other thing I will say or commend, is that Illinois has allowed the online apps as part of the equation. As discussed on the Side Action, the states that have been most successful have an app or multiple apps, including Nevada. Our lives are on our phones and tablets. So, thinking that a physical location is necessary or successful has been proven to be incorrect. Ask West Virginia. So, I’m glad to see that part, not sure why you would want to exclude FanDuel and DraftKings, but the local casinos will only have an 18 month head start.
I know I’m excited for the bill mainly because Action and I have been talking about it for a year now.
Let the games begin!!
Wegs