Almost five years after the repeal of the Professional and Amateur Sports Protection Act (PASPA), the U.S. sports betting and igaming industries are showing early signs of maturity.
PASPA was judicially overturned on May 14, 2018. Next month will mark half a decade since that game-changing decision by the by U.S. Supreme Court.
While the U.S. still has a lot of growing to do, the frenzied land-grab of the last half a decade is undoubtedly slowing, and defining characteristics are starting to emerge.
In the early days of the U.S. sports betting market, the industry was warned to treat each state as akin to a separate country and avoid attempting one-size fits all approaches to rolling out across multiple jurisdictions.
However, while it remains the case that each state has its own set of rules, fees, and taxes, there are some over-arching features of the industry that apply across the board and some emerging trends that can be considered relevant in almost every state.
Among these is the role of the tribes in U.S. gaming. This was a known factor well before PASPA was overturned, but in the rush to gain dominance in the U.S., some key players have overlooked the influence of the tribal gaming community to their eventual chagrin.
The attempts to legalise sports betting in California last year starkly revealed why choosing not to co-operate with the tribes may not be the best way to promote the growth of the industry.
Across 29 U.S. states, there are 510 gaming businesses operated by 243 federally recognised tribes. Of those, 43 gaming operations reported more than $250m in gaming revenue last year. The scale of their influence is sizable.
Across the country, tribes are fighting against commercial operators, as they did in California, or fighting for their sovereignty over certain gaming permissions, as they did against card room operator Maverick Gaming recently.
The conflict between commercial and tribal operations is a defining characteristic of the U.S. gaming marketplace that looks set to continue for some time.
Elsewhere, we see an emerging focus on responsible gambling by regulators. This is an issue that took many years to really permeate the European market, but in the U.S. it is emerging as a significant consideration for operators going forward.
In September, the Responsible Gambling Collaborative (RGC) was launched to establish industry-led responsible gambling standards, with Bally’s, BetMGM, DraftKings, Entain, FanDuel and MGM Resorts International among its earliest members.
Last month, Fanatics Betting and Gaming, Hard Rock Digital and PointsBet became its newest members. Each operator is expected to adhere to 12 principles set out by the RGC, with their actions reviewed externally by a panel of experts who inform the future of the initiative.
It’s a high-profile commitment to the safety of the industry in a market that has seen a messy, expensive and highly competitive start to life. The level of bonusing and expenditure on customer acquisition in the early years does not seem entirely in line with responsible promotion, for example, but as the major players settle into their highly sought after positions at the top of the market, it seems a more pragmatic approach may now prevail.
That said, Washington D.C. has this week been criticised for stripping problem gambling services funding from its proposed 2024 budget.
American Gaming Association senior vice-president Chris Cylke responded by calling the move a “misstep” by the D.C. government, in their effort to offer a viable legal sports betting market.
“The AGA will work with other stakeholders to ensure the district makes good on their obligation to provide problem gambling resources, as well as continue to highlight the need for a competitive mobile marketplace that will increase revenue to fund these important commitments,” he added.
However, as the industry grows and matures it may be that greater onus will be placed on operators themselves to mitigate the risks of gambling harms and fund the relevant services to treat those who do come to harm.
The RGC has called out states in the past for not spending tax revenue that should have been allocated to prevention of gambling harms as it was intended.
In a 2020 report, it said: “Each year, the casino gaming industry generates nearly $10 billion in gaming tax revenue for state governments, some of which is intended for advancing responsible gambling efforts and the prevention of problem gambling.
“While many states are spending these funds for their intended purpose, others are not. These state funds compliment the hundreds of millions of dollars voluntarily invested by the gaming industry each year to ensure that Americans are playing responsibly.”
Where the buck will ultimately stop remains to be seen, but it’s clear that a heightened focus on player protection is going to be a prominent feature of the future of the U.S. industry and possibly a deciding factor in how and when states that are yet to legalise sports betting will do so.