There have been some big surprise winners – Kansas for one – so far this year when it comes to sports betting legislation, but some losers as well. North Carolina and Florida fit firmly into the latter group.
Massachusetts remains up in the air.
California voters, meanwhile, have their chance to weigh in this coming November on two very different proposals.
Here is a deep dive into the sports betting winners and losers so far in 2022.
The Sunflower State was not on many radars when the year began.
“The biggest surprise is Kansas moved forward but Missouri did not. I always thought those two would be a package deal,” said John Pappas, an expert on sports betting and gambling laws. He is the founder of CorridorDC, a Washington, D.C.- public affairs and lobbying shop.
The Kansas sports betting bill stipulates:
- A white-collar crime fund to help with gambling-related assistance;
- 80% of gross revenue after the white-collar crime disbursements goes toward attracting a professional sports team to Kansas;
- Allows for collegiate and professional sports betting;
- The four existing casinos may partner with up to three online sportsbooks;
- The state lottery, which will administer sports betting, must set up guidelines by Jan. 1, 2023.
The money for the purpose of bringing a professional sports team to Kansas – the state only has one right now, MLS’ Sporting KC — could have been the provision that brought the bill to the finish line, suggested another expert.
Lawmakers rely heavily on staff to explain legislation because many of them are well versed on only a few select issues, said Steve Brubaker, a lobbyist and mobile sports betting analyst. They may oppose gambling, but there is wide support to bring Kansas City Chiefs to the state, he said.
“It may have helped them,” Brubaker said. “…. I think the idea of trying to get the Chiefs to come across the river is a good soundbite.”
On the day the governor signed the law, local casinos took the state to court because of provisions regarding gaming machines that showcase horse racing. The casinos involved said on the day they filed the case they supported sports betting.
Lawmakers have tried for several years to approve sports betting in Maine, but Gov. Janet Mills was not on board. Until this year.
Under the terms of LD 585, passed by the Maine legislature in April, mobile sports betting will be administered by the state’s tribal interests. Limited retail sports betting will be available at racetracks and casinos.
The bill allows for four mobile licenses, controlled by the tribes. Adjusted gross revenue from sports betting will be taxed at 10%, but money earned by the tribes will not. There will be limited retail sports betting opportunities at state racetracks and casinos. State experts predicted 85% of sports betting would be done online.
Since the tribes control the marketplace for mobile sports betting, one legal expert suggested they are the real winners, more so than the state itself.
“They have become the first group who have exclusivity of online sports betting,” said Daniel Wallach, an attorney who specializes in sports betting legislation.
Pappas said he didn’t think the legislation was a “serious effort” to bring sports betting to the state because of the regulations that were put in place.
“This isn’t an ideal situation for an online sportsbook,” he said.
Milton Champion, executive director of the Maine Gambling Control Unit, explained the process to bring sports betting to fruition in Maine will take time. The law doesn’t take effect until July 1. After that, the state has to set up public hearings to determine how it will run.
Champion said he expected sports betting to be up and running by mid-to-late 2023. He noted it could be sooner, but didn’t want to promise because then supporters would be disappointed.
At times this spring, it seemed like the Tar Heel State might take action on mobile sports betting this year.
The Senate passed Senate Bill 688 in 2021, and a House committee approved it in Nov. 2021. Then nothing.
Fast-forward to June, and with less than two weeks left in the session, word leaks out that a deal might happen.
The deal became known as Senate Bill 38, which addressed concerns sports betting opponents had with SB 688. Language in the original SB 38, completely unrelated to sports betting, was scrapped. And a new bill, meant to pass in tandem with SB 688, emerged.
Within a 24-hour period, three different House committees passed both SB 688 and SB 38.
The new bill included funding for Historically Black Colleges and Universities, a narrower sunset provision for tax exemptions for promotions sportsbooks offer to customers, and even a ban on collegiate sports betting. The latter of which was added during floor debate in the House.
SB 38 passed the House 51-50.
But less than 90 minutes later, SB 688 failed by the same margin. Opponents had successfully argued the process was rushed, that North Carolina had been tarnished by sports scandals in the past, and that it was just a bad idea.
“This is bad: pure, simple, straight-up wrong,” state Rep. Abe Jones said on the House floor.
Brian Murphy, a sports investigative reporter for WRAL-TV in Raleigh followed the sports betting issue closely. As a former political reporter, he has deep contacts in the statehouse. He reported on June 30 that sports betting was likely dead for the year, but at least one advocate wasn’t completely shutting the door.
“Source involved with North Carolina sports gambling bills: ‘Due to the time restraints of this session, we do not see a path forward before adjournment this week. We are hopeful there will be additional opportunities this year to advance the legislation,’” he tweeted.
Assuming, however, that lawmakers do not take up sports betting again in 2022, it will be at least mid-to-late 2023 before North Carolinians can place mobile sports bets. And that is only if General Assembly actually passes it – which is a big assumption.
When the year started many observers thought Missouri had the momentum to approve sports betting while Kansas would be left in the dust.
But Missouri lawmakers got bogged down in details about video lottery terminals, also known as VLTs. Casinos in the state do not want VLTs regulated and legalized. The casinos’ belief is that if VLTs are legalized, that would cut into their market share.
The Missouri House approved sports betting legislation, House Bill 2502, in March. This bill did not regulate VLTs. It was amended in the Senate to include the controversial piece.
A few weeks of back and forth produced nothing. And then one of the leading advocates of sports betting, state Sen. Denny Hoskins, essentially shut the door on a 2022 sports betting agreement by filibustering legislation that included VLT regulation.
Wallach predicted it will eventually get done in the Show-Me State, arguing it just takes time. But Pappas was not so sure.
“Without issues being resolved, I don’t know where we go from here,” Pappas said.
Sports betting was passed in Ohio in Dec. 2021. But the Ohio constitution says laws don’t take effect until 90 days after the governor’s signature. The law put in place a lengthy regulatory process.
And to get all stakeholders on board and to ensure no sports betting operator gets a head start on the competition, a universal start date of Jan. 1, 2023 was mandated.
Earlier this month state officials announced the state would not start sports betting until New Years Day. While the state is leaving tax revenue on the table with the universal start date in place, small businesses who qualify for a Type C licence will need all the time they can get.
Gov. Ron DeSantis celebrated in Spring 2021 when he signed a new gaming compact with the Seminole Tribe of Florida. In exchange for billions of guaranteed dollars to state coffers, the tribe was given exclusive rights to mobile sports betting.
And for a few weeks in the fall, mobile sports betting was alive and well in the Sunshine State.
But on Nov. 22, U.S. District Court Judge Dabney Friedrich ruled the compact was illegal. She called the tribe’s claim that bets placed through a server on tribal lands, even while the bettor is on South Beach or Jacksonville, “fiction.”
Mobile sports betting in the state was shut down about a week later.
Since then, there has been virtually no action. Experts agree the earliest sports betting will come to Florida is through a voter referendum in 2024, meaning 2025 is realistic for launch.
“It’s a ways off,” said Brubaker.
The state could accelerate the time frame by rewriting the compact addressing Friedrich’s concerns. This would require the governor and the tribe to come back to the table, as well as the legislature to approve a new agreement.
Wallach described this scenario as a “Hail Mary that likely won’t happen.”
Other States Failed to Act
Alabama, Georgia, and Minnesota all made various efforts to pass sports betting legislation in 2022 but were unsuccessful.
Minnesota lawmakers passed sports betting in the House. But a Senate version, which advocates said had no chance of survival in the House should it get that far, never made it to the Senate floor.
There is still some time for some states to take action on sports betting in 2022, although in several cases the clock is ticking.
The Bay State has been working on sports betting for two years. And it’s coming down the wire. The Massachusetts Legislature adjourns on July 31.
Both the House and the Senate have passed sports betting, but big differences remain. The House version, which passed 156-3 in July 2021, would allow for bets on collegiate sports. The Senate version, passed by voice vote in April 2022, would not. Other differences include tax rates and the use of a credit card.
Members of a conference committee began meeting last week, and experts are optimistic a deal will be reached in time for the bill to become law this year.
“It is very conservative for (what is) often considered a progressively minded state,” Pappas said of the legalization process in Massachusetts. “The Senate approach reflects that conservative nature,”
“There is plenty of room for them to meet in the middle, [and] I’d be surprised if they should get this far and it doesn’t get done.”
In California, voters will have not one, but two ballot proposals to consider when they go to the polls in November.
The first measure, which was certified to be a referendum question more than a year ago, is backed by tribal interests. It would authorize retail sports betting at the state’s tribal casinos only.
It has the support of numerous civic and community groups that argue the tribes need sports betting to ensure economic prosperity.
“Our support of the Tribal Sports Wagering Act is consistent with our long-standing support for disenfranchised communities to become self-sufficient,” Rick L. Callender, president of the California Hawaii State Conference of the NAACP, said in an April press release backing the initiative.
The second measure is supported by major sportsbooks like DraftKings and FanDuel and would help fund homelessness and mental health initiatives. It would allow for mobile sports betting not tethered to the tribes.
Last month, backers submitted more than 1.6 million signatures to state officials. They needed around one million to be approved. The state did just that on Monday, three days ahead of the deadline.
Wallach said the big question will be if both initiatives pass because “they are completely incompatible with each other.”
Other experts have suggested the margin of victory matters in terms of what initiative becomes law. Supporters of the sportsbook-backed proposal are unlikely to challenge the tribes if they both pass but the sportsbook plan receives more votes. The same cannot be said if both pass and the tribes come out on top.
The ad wars will play a big part in which side wins in November. The expectation is both sides will spend millions advocating their own intiatives and against the other.
Opponents to the sportsbook-backed proposal have begun airing ads aimed at promoting the sovereignty of the tribes and the expected impact out-of-state big businesses will have.
Brubaker believes the sportsbooks have a chance to come out on top because they are a known entity in the state due to DFS. He put the odds at “50/50.”