In a couple of months it will have been three years since the U.S. Supreme Court deemed the Federal ban on sports betting unconstitutional. Since the repeal of PASPA in May, 2018, more than half the country has already legalized sports betting and there are no sign that the expansion is slowing down.
To take the pulse on the industry, we spoke with Jessica Feil of the American Gaming Association to get her thoughts on how the sports wagering markets have evolved and also discuss some of the challenges that come with such rapid growth.
How would you describe the mission of the American Gaming Association and what has been the biggest change for your organization following the PASPA repeal 2018?
Feil. When the Supreme Court struck down PASPA nearly three years ago, a huge opportunity opened for the gaming industry. Bringing in sports betting as a new gaming vertical has allowed our industry to continue to grow, especially by encouraging consumers to migrate to legal, regulated sports books. Now with the pandemic, sports betting has been a highlight for our industry and our customers who use this entertainment option as a new way to engage with the sports they love.
AGA has focused on promoting sound public policies that will allow the sports betting industry to grow and thrive, including reasonable tax rates, robust regulatory and licensing oversight, and essential responsible gaming standards. Sound legislative and regulatory environments allow vibrant gaming markets to develop, which in turn draws in new consumers and depletes the illegal sports betting industry.
What are the biggest challenges facing the sports betting industry in the U.S. today? As we hopefully come out of the Pandemic at some point, what can we expect to see in terms of new legislation and industry movement as states are opening up sports activities again?
Feil. As states continue to navigate the pandemic, they have unique and sustained pressures on their budgets. Many legislatures are looking for new ways to generate tax revenue that will support essential public services and pandemic recovery efforts. While sports betting is a relatively low-margin gaming vertical, it can still be a valuable piece of the budget puzzle. However, it is critical that lawmakers understand that a high, overly burdensome tax rate and licensing fees will only stifle innovation and industry growth. It is essential that lawmakers establish reasonable taxes and fees that will allow new sports betting markets to innovate and reinvest, and in turn generate meaningful tax revenue.
As sporting events continue to open to fans, we will see increase engagement through wagering, both in-person and online. States that are yet to legalize sports betting are looking to other states with active markets and learning from them, from how to regulate gaming successfully to how sports betting increases business opportunities for teams, leagues and stadiums.
Which states do you feel are a good role model for the industry overall today? What could states that are planning to launch sports betting learn from the leading markets?
Feil. Today, 25 states plus the District of Columbia have legalized sports betting, resulting in a variety of different regulatory systems. Each state must design a regulatory system for sports betting that meets the unique needs of their jurisdiction, including size, gaming properties already in the state and more.
We’ve seen the greatest success from states that focus on creating a competitive marketplace, including providing consumers the choices between a different sports books, access to type of wagering they want including mobile or in-person, and setting reasonable tax rates. States like New Jersey, Indiana, and Michigan all have created robust sports betting markets that show how different public policies can equally contribute to success.
You mentioned in a recent interview that wagered U.S. bettors wagered $21 billion on sports in 2020, an increase of 62% year-over-year. What is the current prediction for 2021 and beyond?
Feil. One thing we know is that legal, regulated sports betting will continue to grow. Even with pandemic-related closures, states with sports betting have still generated record revenue returns in the past several months. This is attributable to sustained efforts to make consumers aware of the legal, regulated sports betting options available to them.
Further, as more states legalize sports betting, more consumers will have easy access in their home states. Right now, roughly 39% of Americans have access to regulated sports betting, and we look forward to this percentage increasing.
Offshore books are still being referenced on mainstream media and the transition to legal U.S. sports betting has been slow. What can we do to better educate the U.S. betting audience about legal, domestic sports betting?
Feil. Our research shows that consumers want to use legal, regulated sports books, but they often have significant confusion about how to find them. And while some media outlets confuse offshore sports books with “Vegas odds” we have made significant progress in the last three years.
It remains essential that the industry continue to educate consumers and media alike about the benefits of regulated, legal sports books. These benefits include responsible gaming protections, assurances of game and betting integrity, and protections and security for consumer funds and personal data. Bettors report that these are top priorities for them when choosing a sports book, so we will continue to highlight these benefits for the public, the media, and policymakers.
What are the key considerations for bettors and operators to ensure a fair and safe betting experience in 2021?
Feil. Legal, regulated sports betting is the only way to ensure a fair and safe betting experience. Our sports books work every day to implement rigorous consumer protections. Further, consumers can be confident that our sports books are monitoring the wagering and games closely, to ensure the integrity and fairness of the games themselves. When anomalies or unusual patterns are identified, regulated sports books are the first stop suspicious wagers and connect with gaming regulators, law enforcement and sports leagues to investigate.
Finally, which states do you think will legalize betting in 2021?
Feil. Predictions are very challenging and this year is no exception with the unusual constraints and demands presented by the pandemic. We’re looking forward to the three states which legalized sports betting through a voter referendum last year – Maryland, Louisiana and South Dakota – implementing their enabling legislation that will move those states closer to launch.
Connecticut is on the cusp of legalizing sports betting through the state’s two tribal gaming properties. Last year, Massachusetts and Ohio were very close to legalizing sports betting, so they have started this year’s legislative session with a strong foundation. Many other states continue to make strides, including Missouri and Nebraska as well. There is much to be optimistic about in 2021 and beyond