When the Professional and Amateur Sports Protection Act was repealed in 2018, it opened the floodgates for legal retail and online sports betting across the country. Many expected that jurisdictions would similarly embrace igaming. But only seven jurisdictions have legalized igaming compared to the 38 states and the District of Columbia that have adopted some form of regulated sports betting.
During the session “Exploring the Path to iGaming Expansion” at the National Council of Legislators from Gaming States (NCLGS) Summer Meeting, panel moderator Gabe Benedik, GLI Senior Executive, Government Affairs, referred to the slow pace of igaming adoption as “second-kid syndrome.”
During the session at Rivers Casino in Pittsburgh, Pennsylvania, he explained, “Everyone went through sports betting and learning and letting it grow up, like all the trials and tribulations of having a first kid and all the things that go into that. It’s like we really want to have another kid, but we’re still dealing with the first kid, who’s acting crazy and acting up and running around. How do we control it?”
Or more succinctly, how do igaming advocates advance their cause?
For NCLGS President Shawn Fluharty, also a West Virginia state representative, the lack of igaming advocacy is due to an “education gap. A lot of people were complacent when sports betting took off and 30 states jumped in right away, and those in the industry thought the igaming side would follow suit.”
Many legislators, Fluharty noted, “struggle to silence their cell phones in a committee-meeting setting. In a committee meeting, all their phones are going off and now we’re trying to tell them, ‘Oh by the way, you’re going to have a casino on that thing.’ And they look at you and go, ‘What? How’s that work?’ I think there’s a clear education gap in the industry.”
The lack of progress on igaming, according to Eilers & Krejcik Gaming Partner Emeritus Chris Grove, is comparable to the Swiss cheese metaphor in security.
“There’s this idea that you build a security system that’s like layers of Swiss cheese,” Grove said,” so the chance that someone gets through all the holes is pretty small.”
For igaming, Grove said, getting through all the layers of opposition is like threading a specific needle.
“You’ve got labor that’s opposed. You’ve got voters who are apathetic to opposed,” Grove said. “You’ve got digital stakeholders who want one version, retail stakeholders who want another. If you’re in a state where there’s a conservative streak culturally, you’ve got to overcome that as well. And if you’re in a state that has any kind of convenience gambling, whether that’s VGTs, route, or tribal, that’s a whole other dynamic.
“So it’s really trying to identify not just the folks that you need to educate, but the folks that you need to provide a clear benefit to, a construct that allows for some sort of alignment.”
Bose McKinney & Evans Partner Ali Bartlett, a lobbyist based in the state of Indiana, said, “People were beating down the doors for the legalization of sports betting” after the repeal of PASPA. “I’m not getting constituents lined up at my door asking for igaming,” Bartlett said, adding that she works to attract bipartisan support, “although the messaging is different for both (parties).
“I see a lot more concern on the Republican side about a casino in every pocket (a phrase attributed to the late Las Vegas casino magnate Sheldon Adelson). I also think that’s where the black-market education has to be. We have to remind people about it.”
Fluharty said a solution to igaming’s lack of progress might be how it’s framed. Give people a choice: raise taxes or legalize igaming.
“What do you think every single person on the street is going to say, regardless of whether they know what the hell igaming is?” Fluharty said. “They’re going to say pass igaming, because I pay enough taxes already. So the ability to raise new revenue without raising taxes is an opportunity.”
Grove said that ostensibly, legalization is “incredibly compelling.” If there are doubters, they need only look to New Jersey, Pennsylvania, West Virginia, and the other states that make igaming available to their constituents.
“The numbers are staggering for any state regardless of size,” Grove said. “There’s an upfront component with licensing fees, in addition to the back-end tax revenue. There are states that have executed it to perfection and shown what a working sustainable model looks like and have the receipts to prove it.”
