Published: May 20, 2018

The Bettor’s State-by-State Guide to Legal Sports Gambling

The Bettor’s State-by-State Guide to Legal Sports Gambling

U.S. Supreme Court Rules States Can Legalize Sports Gambling

Now that the Supreme Court has overturned the federal ban on sports betting, some fans in the U.S. should be able to place bets within weeks.

New Jersey, which petitioned the Supreme Court for this decision, and Delaware, which currently has a sports lottery that consists of NFL parlay bets, are most likely to move first into this new market. New Jersey’s Monmouth Park is expected to open first. Renowned British bookmaker William Hill has spent five years building a bar adjacent to the horse-racing track in anticipation of Monday’s ruling. The bar, which will be converted into a sports book, recently added TV screens and about 30 betting windows to prepare for larger crowds.

“If I had my choice, I am going to be up and operating in two weeks, and it’s possible I may even start doing something even sooner than that,” said Dennis Drazin, chairman of the group that operates Monmouth Park. “But our governor has to way in, the legislature has to weigh in.”

Other New Jersey sites will likely follow shortly after. That could include casinos in Atlantic City and online sites like daily fantasy giant DraftKings, which recently hired a head of sportsbook and opened an office in New Jersey.

For the rest of the country, moving forward is a bit more complicated. Gambling research firm Eilers & Krejcik estimated that, if allowed by the court, 32 states will legalize sports gambling in some capacity by 2023. On William Hill Plc’s earnings call last week, Chief Executive Officer Philip Bowcock said that the company was operating under the assumption that New Jersey and Delaware would make legal sports betting available almost immediately, followed shortly by Mississippi and West Virginia.

They’re lured by the tax windfall of regulated sports gambling. Similar motivations have led 24 states to offer commercial casinos, up from one -- Nevada -- 30 years ago. Each state will set its own taxes on sports bets. So far, they range from around 7 percent of revenue to as high as 34 percent. Companies in the U.K., where sports betting is legal, pay 15 percent. Even at the lower rates, even the smallest states expect taxes on sports betting could generate millions every year.

West Virginia, for example, could generate as much as $16 million, according to an estimate from the American Gaming Association, while a more populous state like New Jersey could gain as much as $84 million in annual tax revenue. The states also expect betting to generate additional government revenue through the federal handle tax, plus added property and employment taxes from the new industry. The governor of Rhode Island, the country’s smallest state, included $23.5 million in additional revenue related to sports gambling in her proposed budget for the next fiscal year.

Five other states have passed laws that were ready to be enacted if the Supreme Court lifted the federal ban, according to Legal Sports Report: New York, Connecticut, Pennsylvania, West Virginia and Mississippi. Another 14 are considering active bills: California, Louisiana, South Carolina, Oklahoma, Kansas, Missouri, Iowa, Indiana, Illinois, Kentucky, Michigan, Ohio, Maryland, and Rhode Island.

States that decide to go forward with sports betting will have to decide how to make licenses available -- whether, for instance, to limit them to existing casino operators or to run betting through lotteries -- and whether to allow operators to take bets online. States that have already passed laws also have many questions yet to be resolved. Connecticut and New York haven’t established rules for mobile betting. West Virginia and Pennsylvania both plan to allow it. Mississippi is leaning toward restricting bets to casinos, at least at the start.

Professional leagues, including the NBA and MLB, have been lobbying state legislators to award them a 1 percent cut of all bets placed on their sports, and to require sportsbook operators to use -- and pay for -- official data streams.

The leagues are also pushing for some sort national framework that would avoid state-by-state peculiarities. It will probably take a while, even at the state level: a number of states have already adjourned their legislative sessions.

For fans wondering whether they’ll be able to place bets on NFL games this fall, “New Jersey is a lock,” says Chris Grove, managing director at Eilers. “Mississippi has a good chance. And I think Delaware has a good chance as well.”

© Public Gaming Research Institute. All rights reserved.