Most state legislatures have adjourned and “it is a time to reflect on the sausage-making process.” So wrote B Global founder Brendan Bussmann in his latest political assessment, published by Truist Securities.
“Borrowing the phrase ‘hope is a strategy,’ many of these sessions came down to just that — hope that legislators would get things across the finish line before sine die,” penned Bussmann, noting that most of the success lay in the form of “clean-up bills.”
The only notable breakthroughs were legalization of sports betting in Kentucky and Vermont. The possibility of sports betting, slot routes, and even private-sector casinos is still on the docket in North Carolina. Despite progress in the Tar Heel State, Bussmann thought solons might have to go into a July special session to resolve those issues.
At the time of Bussmann’s writing, the North Carolina Senate was poised to approve sports betting [it passed on Wednesday by a vote of 38-11] and send it over to the House, where opposition was expected to be heavier. “All indications are that should it pass and it will go to conference committee for concurrence with the House before they adjourn.” Bussmann thinks “the third time is the charm,” sports wagering having failed in two previous legislatures. It’s the priority, with slot routes and additional casinos becoming possible action items in a July extended session. “This remains a viable addition in revenue to the budget, but yet to be determined on how it is all crafted.”
In Vermont, the focus is on whether GOP Gov. Phil Scott will sign off on sports betting. Approving the bill would end what Bussmann calls “border wars” with neighboring states, all of which offer some form of legalized gambling, unlike the Green Mountain State. Although the legislative session ended some weeks ago, Scott continues to withhold his signature. If he ultimately approves, Vermont would become the fourth U.S. jurisdiction to launch sports betting this year, behind Puerto Rico, whose actual lauch “is anyone’s guess at this point.”
Bussmann called the Texas legislative session “momentous” for the industry; though ultimately a failure, it was “a step in the right direction.” Two pro-gaming bills were voted out of committee and sports betting even got sent over to the state Senate “by the required two-thirds for it [only] to fall on a quick sword offered by Lieutenant Governor Dan Patrick.”
Bussmann sees the Lone Star State’s Senate as the greatest and more durable obstacle to gambling expansion, well beyond 2025. As for casinos, they’ve been promoted for 15 years, without avail. “Proponents continue to push and came close to having enough votes to move things over to the Senate, but fell short by a couple.” There, he sees little hope of passage unless Republicans lose their majority: “It is all about taking the benefits at this point on both issues, as gaming remains live in well in Texas. Just ask all the owners of eight liners.”
Despite six years of debate, Missouri is still hung up on sports betting, having filibustered it to death in successive legislatures. Bussmann opined that the main obstacle is twofold: the contentious issue of black-market slot routes (which are seeking legitimacy); and state Sen. Denny Hoskins’ continued “desire to put personal interests above all else. While Senator Hoskins’ hijack of the bill was entertained this year by reading from President Ronald Reagan’s biography and the Star Wars Trilogy, he used the disguise that sports betting was the sole reason why education reform and property tax relief didn’t get done, even while he was the hold up.”
Since a repeated push of sports betting through Jefferson City is liable to encounter what Bussmann calls “the Hoskins Hijack,” the analyst proposes putting the issue to a vote of the people. Professional sports teams, he believes, will have to be part of the advocacy process, “but it is a viable path if executed correctly.” He also thinks it could get lawmakers off the dime for fear of being rendered irrelevant at the ballot box.
Work now begins, Bussmann said, on the 2024 sessions. He outlined “protectionist” conventional wisdom that if politicians vote for gaming expansion in an election, they can kiss their offices goodbye. It’s all about protecting oneself to fight another day, he said. However, “No one to our knowledge has ever lost their reelection effort because of their stance on gaming.”
Given this realpolitik, Bussmann continued, next year may be one in which politicians punt hot-button issues of gaming expansion to the electorate. He sees possible constitutional amendments emerging in the Bible Belt, particularly Georgia and Alabama. “Texas failed to act, so we move on to the next election cycle. But that does not mean other states do not look to the ballot to get things done that get logjammed in the legislative process.”
Irrespective of the form of gambling being debated, the analyst continued, the burden is on the gaming industry to educate legislators on the issues at hand. “It’s been one of the challenges in 2023 and it will be going forward until the industry can get on the same page,” Bussmann wrote.
He outlined a strategy that stresses “strict regulation, low tax rates and license fees that encourage investment, and eliminating the illegal market. Regardless of the area of focus, the industry should be able to agree on those items, even against the constructive narrative created by some outsider and shots that have been taken over the last year that have made hearsay become fact before of the lack of response.”
Bussmann sees little change of progress until the gaming industry coalesces “behind the facts” and emphasizes gaming’s benefit to communities “in a clear and coherent message.”
Still, he noted that Job One needs to be extirpation of illegal gambling before legal regulated gambling takes its place in new markets. He added that “until the education piece is fixed, the stalemate will continue and only incremental wins will occur.”
