Analyst quantifies California sports-betting flop and prospects in five other states

December 1, 2022 12:16 PM
Photo: Baishampayan Ghose [CC BY-SA 2.0], via Wikimedia Commons
  • David McKee, CDC Gaming Reports
December 1, 2022 12:16 PM
  • David McKee, CDC Gaming Reports
  • California
  • Maryland
  • Massachusetts
  • Nebraska
  • New York
  • Virginia

More registered California voters signed petitions to authorize California’s Proposition 27 to legalize online sports betting (OSB) than actually voted for it. That was among the key takeaways of a political overview from Brendan Bussmann, published under the auspices of Truist Securities yesterday.

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Bussmann is the founder of B Global, a consulting-services firm to the gaming, sports, and hospitality industries around the globe.

On the subject of California, he noted that both Proposition 27 and tribally backed Proposition 26 “failed … by larger-than-expected margins” and that the collapse of Proposition 27 “may be one of the lowest-performing initiatives without including the amount spent.” While holding out hope for a compromise between tribes and private-sector companies, Bussmann cited “voter fatigue” as a possible motive for pushing any electoral revisit to the issue back to 2026.

In the highly contentious application process for three New York City casino licenses, Bussmann added the Chickasaw Nation, which has dibs on one at Coney Island, to the list of “likely” contenders. Although Wynn Resorts and Bally’s Corp. have cooled their Big Apple rhetoric lately, Bussmann still short-lists them, along with incumbents MGM Resorts International (owner of Empire City Yonkers) and Genting Group (Resorts World New York), and outsiders Caesars Entertainment, Las Vegas Sands, Hard Rock International, and Rush Street Gaming.

To the south in Virginia, “All eyes are now on Petersburg” in the wake of a casino-viability study commissioned by the state legislature. The city has aced out Richmond for Virginia’s last casino, it would appear, with Cordish Cos. defecting to the Richmond cause. “This is after several developers believed they were the darling of [Petersburg] in what may be as interesting of a process as the failed Richmond casino effort that was also aiming for the hometown team in Urban One … regardless of the process. This will play out over the next few months and spill over into the Legislative Session,” Bussmann wrote, adding that solons would also likely revisit the issue of “skill-based” games (i.e., gray-market slots), which were provisionally licensed as a quick revenue source during the pandemic.

The consultant fumed that Maryland sports betting, “after months of unnecessary delays,” went live just prior to Thanksgiving, giving credit for moving the ball to outgoing Gov. Larry Hogan. In that first weekend, Maryland racked up 16.5 million-plus transactions from more than 477,000 unique accounts, “almost double what Virginia saw with a larger population during their initial launch.” There was nothing to report from Ohio, where sports betting won’t be unleashed until New Year’s Day.

Based on the amount of progress in Massachusetts (only 12 of 15 OSB permits have corresponding applications), Bussmann doesn’t think sports betting will launch until late January, at least in its retail form, with OSB following in March. “This is significantly longer than initially anticipated based off of the [Massachusetts Gaming Commission’s] long-term research into how to conduct sports betting, but this is due in part to not having an understood bill until the clock went past midnight during the legislative session.”

Finally, in Nebraska, outgoing Gov. Clay Ricketts appears to be trying to run out the clock on the racinos that he vocally opposed in the 2020 election cycle. Fonner Park in Grand Island is aiming for an opening that coincides with the December holidays, while Legacy Downs in Lincoln has been operating since September. Still in limbo are a Harrah’s-branded project in Columbus and an unaffiliated one in Hastings. As for early revenue forecasts, “Revenue has starting to come in from the Legacy Downs facility, but currently appears behind initial projections shared with stakeholders on the revenue potential with their temporary facility.”