While Montana is the latest finisher in a race to legalize sports gambling that began with a 2018 Supreme Court ruling, three others are close behind, with bills awaiting governors’ signatures.
A handful more are inching toward operational sportsbooks, allowing them to tap billions in revenue, and Colorado voters will decide the issue for themselves in November.
Altogether, lawmakers in more than 20 states considered such legislation in 2019, and eight others acted last year, when the high court struck down the 26-year-old Professional and Amateur Sports Protection Act.
Despite those moves, the spread of sports betting is likely to be slower than predicted, since lawmakers have only “one chance to do this the right way,” said Casey Clark, the American Gaming Association’s vice president of strategic communications. “It’ll require a slower pace than one federal bill, because we don’t have a nation that’s one-size-fits-all.”
The association estimates Americans illegally wager $150 billion a year on sports, and for many states, the prospect of a new revenue source is a main driver in the push toward legalization, said Dustin Gouker, lead sports betting analyst for PlayNJ.com.
“If you get a mature market and it’s online, that’s a decent amount of money,” Gouker said.
In Montana, which approved gambling through kiosks and mobile applications at licensed dining establishments, wagers are expected to total more than $65 million in 2020 and revenue is projected to top $3.7 million, according to an analysis conducted by the state. In 2023, bets are predicted to exceed $87 million, with the state bringing in $5.4 million in revenue.
The measure had the backing of the Montana Tavern Association, but John Iverson, the group’s government affairs counsel, said they aren’t necessarily expecting a significant amount of revenue directly from wagering. Democratic Gov. Steve Bullock signed a bill last week authorizing the state’s lottery to oversee the system.
“We hope that sports betting will invite new customers into our businesses and encourage them to stay a little longer and enjoy the hospitality,” Iverson said.
Before the Supreme Court’s 6-3 ruling last year, states were effectively barred from legalizing sports gambling under the Professional and Amateur Sports Protection Act, passed in 1992.
The federal law came under scrutiny after New Jersey legislators sought to repeal certain prohibitions on sports gambling in 2012 to revive a struggling Atlantic City, where revenue was tumbling as casinos closed.
New Jersey argued the Professional and Amateur Sports Protection Act violated the 10th Amendment, ultimately persuading the Supreme Court to overturn a string of lower court rulings.
The case pitted the Garden State against the country’s major sports leagues, including the NCAA and the NFL. But with states now free to legalize sports betting, the leagues have inked deals with gaming companies such as MGM Resorts and Caesars Entertainment Corporation, which the NFL announced as its “official casino sponsor” in January.
The NFL, NBA, MLB, and NHL could earn a combined $4.2 billion annually from legal sports betting, the gaming association estimates.
“There’s been a drastic move toward alignment of the people within the sports betting ecosystem,” Clark said. Organizations “involved in this in any way are finding ways to get together.”
Still, states differ in terms of offerings to consumers looking to bet on sporting events. Some allow for mobile and online gambling, while others permit consumers to place wagers only in brick-and-mortar casinos.
While the revenue stream is enticing, Gouker said the opportunity to protect consumers is another driver for legalization.
“It’s foolhardy to think you can’t bet online on sports — you can easily do it from my home right here,” Gouker said. “The fact that you can provide a legal alternative to offshore, illegal sports books is a good reason to do it, too.”