Three states will ask voters to consider legalizing sports betting through referendums on their Nov. 3rd ballots.
Some observers may view the vote as a formality, considering the recent, rapid expansion of sports betting in the U.S. No one, however, is taking passage for granted, given the narrow results a year ago when Colorado voters approved sports betting.
Even with sports betting approaching legalization in half of the 50 states in the less than two-and-a-half years since the PASPA repeal, proponents remain cautious.
“It’s worth noting that Colorado’s sports betting referendum was closer than expected,” said Eilers and Krejcik gaming analyst Chris Grove. “Other than that, we don’t have a lot of precedent for appreciating how sports betting is likely to fare as a ballot question. If voter sentiment tracks with general consumer sentiment around sports betting, then the measures are a favorite.”
The three sports betting referenda – in Maryland, Louisiana, and South Dakota – highlight gaming’s presence in the 2020 general election.
Voters in five Virginia cities have up or down ballot questions over a single casino being built in each community, while Nebraska voters will consider three initiatives concerning games of chance at licensed racetracks. And Colorado has a ballot question that seeks to remove wagering limits in casinos and would allow properties to offer other games, such as roulette and craps.
Still, post-PASPA, sports betting legalization remains the hot-button issue in the U.S.
Sports betting consultant Sara Slane said proponents in the three states with ballot questions are focused on promoting the contributions from the gaming industry – jobs and “critical tax revenue for priorities like education.”
Slightly more than two years past the June 2018 Supreme Court ruling that overturned PASPA, 18 states and Washington D.C. now offer sports betting through casinos, racetracks, and online. Tennessee is expected to launch online sports betting before Nov. 1, and the activity is awaiting launch in Virginia, North Carolina, and Washington. Last week, International Game Technology announced a deal to help a North Dakota Indian tribe bring sports betting to the state.
Sara Slane
“Adding sports betting as an option at casinos should receive strong support since sports betting is incredibly popular,” Slane said. “It would make sense for voters to approve creating a legal, regulated marketplace instead of relying on the illegal market, and generating additional tax revenue as state and local governments struggle to bring in revenue as a result of the pandemic.”
According to the American Gaming Association, sports betting revenue is up 18.9% for the first seven months of the year compared to 2019, despite the cancellation of some three months of professional and college sports due to the coronavirus pandemic. The AGA attributed the growth to the opening of nine new sports betting states in the last 12 months. Prior to COVID-19, revenue at commercial sportsbooks was up 235.5% in January and 64.5% in February.
Global Market Advisors Director of Government Affairs Brendan Bussmann said a ballot referendum is the only vehicle available in many states to approve gaming expansion.
“Some groups fear taking things to the people through the ballot,” Bussmann said. “It may make the process take longer in some cases, but it is the right way to handle any expansion.”
It’s not always easy.
Brendan Bussmann, Global Market Advisors
A year ago, Colorado’s Proposition DD was viewed as a slam dunk, with polls showing as much as 60% approval leading up to the election. When the votes were counted, however, the measure passed by roughly 44,000 votes, 51.4% in favor to 48.6% opposed. In August, Colorado sports betting – which launched in May – saw wagering increase 117% to $128.6 million when compared to July.
COVID-19 played a role in the ballot process.
Maryland lawmakers turned the issue over to voters when the legislative session was cut short by the pandemic. The issue is financially backed by FanDuel and DraftKings, while MGM Resorts International, Caesars Entertainment, and Golden Entertainment all currently operate casinos in the state. William Hill US is the sports betting provider for Caesars and Golden.
Penn National Gaming – through a deal with Gaming and Leisure Properties – has an opportunity to acquire Hollywood Casino Perryville in Maryland, seeing the state as an opportunity to expand its sports betting partnership with Barstool Sports.
Bussmann said the vagueness of the referendum “leaves an opening for opponents to defeat it because of the lack of specifics.” However, the states surrounding Maryland offer legal sports betting, so “it’s hard to imagine that it will not pass.”
Louisiana law requires each parish to approve the sports betting referendum. Analysts believe voters in casino markets, such as New Orleans, Baton Rouge, Shreveport-Bossier City, and Lake Charles, will easily approve the measure.
“The trick will be getting through the regulations in the next session of the legislature,” Bussmann said.
South Dakota has just one commercial casino market, Deadwood. The vote is for retail sports betting locations. However, analysts expect South Dakota lawmakers will eventually add mobile sports wagering.
“As long as they continue to educate voters on how a legal market works and they can benefit from actually capturing tax dollars, it should be a win-win for the state,” Bussmann said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
