“March Madness is upon us and it is for a host of reasons,” wrote political analyst Brendan Bussmann in an investor note issued yesterday by Truist Securities.
The B Global founder opined that it’s crunch time for legislators, as election season has brought with it truncated lawmaking calendars. He characterized legislative conclaves as both more focused and circumscribed in their agendas.
About the only consensus that Bussmann could identify was that sports betting, igaming, and other gambling issues were deemed the province of states, not the federal government. That said, few state-capital conclusions had been reached.
Bussmann divided states into two categories. He identified high-tax New York and Illinois as foremost among jurisdictions that “view gaming as a golden goose.” Most of the other states were considered those that regard gambling as an economic propellant that promotes employment and investment. “That second set understands how tax rates matter — as states like North Carolina and Nebraska look to shift the tax burden, they continually see gaming as a resource to do that at reasonable rates.”
The political pundit led with North Carolina, as it will launch online sports betting next Monday. Since it will be live when the legislature reconvenes, Bussmann wrote, it’s no longer subject to debate. Still, casinos, slot routes, and igaming could all be up for grabs. Bussmann predicted the Tarheel State would see another unspecified round of expansion enacted by the legislature’s close.
This week, the Minnesota Senate considers sports betting. It will be the fourth year in a row in which the still-unresolved topic is aired. “Assuming that leadership holds true to their word, this is likely the best chance for the next pickup of sports-betting states,” Bussmann penned.
A second issue confronting lawmakers in the Land of a Thousand Lakes is historical horse racing games (HRRs). Tracks want them. Tribes don’t want tracks to have them, as it would breach tribal exclusivity for slot machines. Bussmann hinted at HRR approval, calling it a “debate that will likely fall to the same fate as it has in other states (such as Arizona, Nebraska, and others).”
He minced no words about Illinois, a state that “goes about gaming legalization the wrong way.” Bussmann was referring to the exponential increase proposed by Gov. J.B. Pritzker to the state’s tax on sports-betting operators, whose impost would increase from 15 percent to 35 percent. “While time will tell it if becomes a part of the budget, the last expansion-of-gaming bill, including some elements of sports betting, have yet to be implemented.”
A legislative pacifier and new tax source in the form of igaming has been put forward. Bussmann thinks slot-route operators in the Land of Lincoln would be able to fight it off. Ditto slot routes in Chicago, which Bussmann feels would make life more difficult for “an already-struggling project” for a Bally’s Corp. casino megaresort in the Windy City.
In Missouri, Bussmann predicted legislators will punt the sports-betting issue to the November electorate. “While it will likely come down to the campaign that is run, this is the best chance for sports betting to get done in the near term,” Bussmann chronicled, adding that if the campaign is muffed, sports betting might not come up again for a number of years.
The analyst believes “the same could be said for the illegal market that continues to run afoul in the state.” These black-market slots, neither regulated nor taxed, may have to look to the ballot box for sanctification “and bring thousands of machines into compliance that sit throughout the state illegally today.”
A mixed outlook came out of the Georgia state house. Bussmann saw daily fantasy sports being hastened “to die a quick death,” but compromise was still possible on sports betting and even casinos, proposals ricocheting between the upper and lower chambers. Even so, two-thirds of solons will have to vote them out and onto the general electorate for final approval.
Casino expansion and other forms of gambling may return from the legislative dead in Alabama. An omnibus gaming bill sailed through the House of Representatives, only to collide with a competing bill in the state Senate. “This is after a series of starts last week in committee that did not have quorum at times and then did not have a finalized bill,” Bussmann elaborated. He went on to say that all components (including a state lottery) would have to make it into the final bill or else they’ll be dead for as many as 10 years.
“Voters appear to be supportive of not only allowing gaming, but cleaning up the illegal operators in the market, but the catch will be in the details that are finally decided by the legislature should a compromise be developed,” Bussmann reported. He added that unlawful gambling needed to be dealt with in the enabling legislation, as well as pleasing the incumbent operators, the Poarch Band of Creek Indians. However, the pundit said he was “optimistic” that a compromise could be achieved and moved to the voters.
Another state where expansion had been resurrected is Maine. Igaming appeared dead, only to be revived late last month. “While the current bill still has obstacles ahead, this may be one of two chances for igaming this year, since New York looks all but lost,” Bussmann wrote. He added, “Continue to watch this smaller state.”
Igaming “appears dead” in New York. Although there is a shortfall in the budget submitted by Gov. Kathy Hochul, she didn’t designate any igaming funds to plug the gap, which blunted legislative momentum. Also delayed are the approval of three New York City casinos and the $1.5 billion in fees they would pay. “It’s a process that has had over 1,000 questions submitted over the last 14 months, 400 of which still need answering,” Bussmann wrote.
The analyst wasn’t optimistic that any Gotham megaresort licenses would be issued before 2025. He added, “That may be delayed further if the past 14 months and history are any indication.”
Maryland was seen as moving both backward and forward on gambling expansion — backward in that betting on college sports will soon be outlawed and forward in the sense that igaming is being contemplated by both chambers of the legislature. It’s a “tale of two committees, with the House seemingly inquisitive and the Senate just listening to testimony.”
Bussmann argued that igaming actually increased industry jobs where legalized, contrary to the cannibalization fears being raised in the Free State. Although a clear indication of which way the legislature would go wasn’t visible, Bussmann noted that “the desire for funds continues to grow,” which will either mean new taxes or “significant” cuts in Maryland’s government spending.
Skill games are present in Nebraska, but not in legitimized form. Thus, the Nebraska Legislature is pondering legalizing, regulating, and taxing them (at five percent). Nebraska needs more revenue, so Bussmann thought this would pass, as will a bill to more closely oversee the Racing & Gaming Commission.
Although the Virginia Legislature hasn’t fully approved a casino referendum for Petersburg, that city has begun shopping for a potential resort developer. A competing bid from northern Virginia was less fortunate. Recalled Bussmann, while that area “has always offered the biggest revenue opportunity for the Commonwealth, the politics make it difficult and it will take several sessions to get this as a location before it then has to pass the voters.”
While skill games were recently banished from the Cavalier State by court order, the legislature is looking to bring them back. A bill to that effect is headed to the desk of Gov. Glenn Youngkin. Bussmann approved, adding that Virginia will probably see the reinstitution of these slot-like devices, 1o per truck stop and four per individual business.
Among the situations hanging fire was the fate of the District of Columbia’s much-criticized GamebetDC sports-betting platform. Some people hope to banish its operator, Intralot. Bussmann reported, “Debate continues to happen in hopes of a competitive market where multiple operators would be allowed … as they are in neighboring states of Maryland and Virginia.”
The Mississippi Legislature, meanwhile, “continues to evaluate” online sports betting. Despite “limited opposition” in the State House, Bussmann was of the opinion it would pass.
