A new legislative podcast about gambling policy has hit the internet. But there’s nothing wonkish here. The two state legislators hosting “Bet on Policy Baby!” are speaking from political experience and having fun. That said, they aren’t joking around when it comes to what they see as good gambling policy.
Sports betting advertising (more needs to be done to regulate it, say the hosts); player protections from social media bullying, especially in the college sphere (it needs to be addressed, they say); and state efforts to crack down on the unregulated online gambling market were brought up in the first episode last week. So were issues gone by, like integrity fees pushed by sports leagues in the first years after PASPA was overturned.
West Virginia House of Delegates Minority Whip Shawn Fluharty recalled pro sports leagues pushing his state to include an integrity fee – based on 1.0 percent of handle – in its sports betting law passed back in 2018.
The pushback in West Virginia and other states has made the integrity fee little more than a memory today. States didn’t bite.
“Look, West Virginia’s not a big state. I know this, you know that. Population: two million. But I also know that we were running legislation in West Virginia to pass sports betting before PASPA was even overturned,” said Fluharty. “So what does that mean if you’re on the outside looking in and you’re an operator or you’re a league? ‘We better get what we want in West Virginia or else it’s going to set a precedent, and we can’t have that.’”
The leagues aren’t complaining today. They have oodles of increased fan engagement and new revenues thanks to legal sports betting.
As for the Mountaineer State, it is setting sports betting revenue records more than four years after taking its first legal bet. It is also setting handle and revenue records in online casinos, which it launched in 2020.
“I’m happy about that,” Fluharty said on the episode. “I’m glad the leagues are on board. We need them to be on board. They are now a partner and that’s why sports betting is so successful.”
Sports Betting Education is Key, Say Podcast Hosts
Fluharty is President-Elect of the National Council of Legislators from Gaming States, or NCLGS, which produces the podcast with support from Spectrum Gaming Group. The Wheeling Independent calls the group by its acronym, which he pronounces “Nicklegees.” NCLGS President and Indiana Sen. Jon Ford is the podcast co-host.
The podcast is an effort by NCLGS to educate legislators (and others) on gaming issues “in the development of public policy related to state-authorized gaming.” Looking at other states is a great way to learn in the still very young US sports betting and online casino industries, both lawmakers said.
Fluharty said he remembers traveling to Colorado several years ago where then Gov. John Hickenlooper (now US Senator) explained how regulated cannabis has benefited his state. According to Fluarty, Hickenlooper said, “We had a billion-dollar black market for cannabis. Now we have a $100 million black market for cannabis.”
“The same thing goes for sports betting and iGaming,” said Fluarty. “Those who want to participate in gaming are going to do it. Now, do you want to be a regulated market where we can have protections in place, or would you rather it be an unregulated market with no protections – and you’re not making any money on top of it? Until you have a regulated industry you’re going to have a black market.”
Addressing the Offshore Gambling Site Problem
NCLGS also advocates for states before the federal government on states’ rights related to gaming. During the episode, Ford mentioned a letter sent recently by several states to the US Department of Justice asking the agency to investigate and prosecute black-market gambling sites that are hurting regulated markets. Massachusetts signed onto the letter last week.
Illegal, offshore gambling sites don’t bother with age verification to protect minors, said Ford. They don’t fund state’s responsible gambling (RG) efforts, or pay any revenue to states. Ford said money laundering is also a real concern with the black market.
Having a regulated market protects consumers and revenues, he said. And states are helping each other to get gambling protections right. Understanding what New Jersey and West Virginia went through to launch sports betting “really helped us in Indiana to craft great policy, and I think really helped us in 2019 to pass a bill that had great consumer protections and get started quickly,” he said.
“You have to remember that sports wagering at that time really was a very innovative space, and we wanted that creativity here in Indiana,” said Ford. “We have learned what consumer protections to put in place that won’t stifle innovation.”
Indiana Looking at iGaming
Fluharty didn’t give up a chance to tease Ford for the fact that Indiana hasn’t yet legalized online casinos. West Virginia is one of only six states – along with Michigan, New Jersey, Pennsylvania, Connecticut, and Delaware – that have.
Not that Indiana isn’t a gambling state. It has both 14 brick-and-mortar casinos and mobile sports betting. “Hopefully soon we’ll have iGaming,” said Ford.
It’s no surprise to those who follow state-by-state gambling revenues why Ford would say that. In West Virginia for example, one month of online casino revenue equates to three months of sports betting revenue on average, Fluharty said on the show.
“And if you extrapolate that out to other states, you get the same model – maybe a little more,” said Fluharty. But legal online casino isn’t catching on like legal sports betting has nationally. Sports betting is legal in over 36 states, online casino is legal in six.
Ford said that doesn’t mean there’s not an online casino market outside those states.
“This is a market that’s here in Indiana, West Virginia, Illinois – they’re playing illegal gaming as we speak to the tune of hundreds of millions of dollars. And we need to articulate that more,” he said on the show. “But then also, just as important as revenue are the pieces of responsible gaming we can put into place with iGaming.”
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