As the US goes to the polls, iGB North America looks further down the ballot at the key gambling developments being put to state populations today.
While eyes around the world will largely be trained on the tussle between Trump and Biden for the presidency, the industry will be keeping an eye on potentially major developments in a number of states.
This will see the question of sports betting regulation put to people in states such as Louisiana, Maryland and South Dakota, and casino regulation in the offing in Virginia.
This parish-by-parish vote proposes legalizing sports betting in the Bayou State, and in districts that secure a majority of votes will be permitted to offer legal wagering to their residents and visitors.
This was facilitated by Senate Bill 130, filed by Senator Cameron Henry and signed into law by Governor John Bel Edwards in June this year. However, as the state is in a non-fiscal (even-numbered) year, the Louisiana legislature was unable to pass a tax component to the bill.
While this could be addressed in the 2021 legislative session, a smooth ride is not guaranteed, going by the plight of fantasy sports. That was approved by voters in 47 of the state’s 64 parishes in 2018, and efforts were made to regulate and tax the vertical in 2019. However, it was ultimately filibustered by Senator Danny Martiny, after the authors of the tax bill refused to incorporate his sports betting proposal into that framework.
Regulations and a tax structure were then passed in July, during a special legislative session in the wake of the novel coronavirus (Covid-19) pandemic. This sets out an 8% tax on gross revenue from paid contests. However, it is yet to be implemented, with the vertical not expected to launch until later in 2020.
It is, however, likely that sports betting will get an easier ride, especially if it is approved in a majority of parishes. A coalition supported by FanDuel and DraftKings, Louisiana Wins, that supports the ballot measure claims the state is missing out on revenue of $330m a year due to the lack of regulated wagering.
Voters in the state will be asked a simple yes/no question on their ballots; whether to expand commercial gaming in the state to authorize sports and event betting for the primary purpose of raising revenue for education.
This was facilitated by Senate Bill 4, filed by Senator Craig Zucker in January, and passed by the state legislature with overwhelming support, including a 47-0 vote in the Senate. The bill passed on the final day of the state’s legislative session, which was ended three weeks ahead of schedule, due to the Covid-19 pandemic.
The matter ultimately had to be put to a referendum, due to a clause in the state constitution that requires any gambling expansion plans to be put to a public vote. Efforts to bypass this by naming the State Lottery and Gaming Control Agency as the regulatory authority for legal wagering, in last year’s legislative session, came to nothing.
Should the measure secure a majority of voters’ support, the General Assembly would be authorized to pass a law allowing the State Lottery and Gaming Control Commission to issue licenses.
This law must set out who is eligible to apply for a license; what forms of betting will be permitted; how betting must be conducted, and where an individual can place a bet. The regulations must also ensure that levies and fees from legal wagering be used to fund public education.
It remains to be seen whether the regulatory framework differs significantly from that included in Zucker’s original bill. SB 4 set out a $2.5m license fee, plus an annual $250,000 renewal charge, and 20% gross revenue tax.
Online operators would also be permitted to operate wagering on behalf of a master licensee, for a fee of at least $5,000.
As well as legalizing online and in-person wagering at casinos, the bill would have permitted betting at three racetracks – Pimlico Race Course, Laurel Park and Maryland State Fairgrounds. There would also be wagering permitted at “a stadium located in Prince George’s county that is used primarily for professional football,” referring to Washington Football Team’s FedEx Field.
The amendment to the South Dakota Constitution being put to voters asks then whether to legalize sports betting within the city limits of Deadwood. Currently, per a 1988 amendment, blackjack, craps, poker, roulette and slot machines are permitted in the city.
The measure was narrowly passed by the House of Representatives, by a 36-27 majority, in March, after moving through the Senate by a 24-10 vote in February.
The actual framework in which sports betting would be offered remains unclear. While the ballot measure does state that tribal operators would be allowed to offer sports betting on their land, it is unclear whether the bill would extend to mobile wagering, either on tribal property or in Deadwood. There is nothing in the bill to explicitly rule out mobile wagering, however.
Furthermore, there is no mention of license fees or tax rates, aside from stating that proceeds from legal gambling would be used for the historic restoration and preservation of the city.
State Senator Bob Ewing, who sponsored Senate Joint Resolution 501, noted that citizens from his district (which includes Deadwood) are already crossing the border into Iowa to place bets. The Deadwood Gaming Association, on the other hand, takes a more stringent tone, warning that betting is already happening illegally, and that it was important to offer a “safe, legal and regulated” option.
Nebraska, which currently prohibits all forms of gambling aside from the state lottery and raffles, is polling voters on a measure to allow gambling at racetracks. However, this is broken down into three distinct components. Initiative 429, first off, aims to add an exemption to Section 24, Article III of the state constitution to allow for gambling at licensed racetracks.
Initiative 430 then sets out the regulatory framework in which licensees will operate. This aims to facilitate the formation of the Nebraska Gaming Commission to regulate gambling at racetracks, which would be permitted to offer slot, table, counter or card games to players aged 21 and above.
Finally, Initiative 431 sets tax rates for the newly-regulated forms of gambling; a 20% gross revenue tax would be imposed on licensees. Of this sum, 70% could go to the state’s Property Tax Credit Cash Fund, and a further 25% to the counties where the licensed racetracks are based. The remaining 5% would then be split equally between the Compulsive Gamblers Assistance Fund and Nebraska General Fund.
These measures, supporters claim, will generate around $65m in new tax revenue for the state, of which at least $40m would be allocated for property tax relief. However, as the legislation would allow gambling on tribal lands, opponents claim, the returns to the state would therefore be lowered.
Citizens in Bristol, Danville, Norfolk, Portsmouth and Richmond will all be polled on whether they will support allowing each city to issue one casino license.
This has been facilitated by House Bill 4, pre-filed by Representative Barry Knight in November last year. The bill, which was signed into law by Governor Ralph Northam in April, allows the state’s casinos to be constructed in cities with high levels of unemployment, population declines, and with a significant percentage of property exempt from taxation.
Based on these criteria, Bristol, Danville, Norfolk, Portsmouth and Richmond are eligible to construct casinos. Danville has already selected Caesars Entertainment as its partner, with the operator funding efforts to convince citizens to vote in favour of a casino in the disused Dan River Mills industrial complex.
Should voters back the ballot measure, operators will be required to pay a $15m license fee, then taxes on a sliding scale starting at 18% on gross revenue up to $200m, then increasing to 30% of revenue above $400m.
In Danville, Caesars is looking to talk up the benefits of jobs – up to 1,300 – and salaries – of at least $15 per hour – from a resort in the city. Opponents, largely on religious grounds, are fighting this, claiming it will lead to greater social deprivation, and using the creative CasiNO! slogan to get their message out.
Finally, there are two gambling measures being put to the public in the Centennial State.
The first, Amendment 77, aims to alter the state constitution by allowing casinos in Central City, Black Hawk and Cripple Creek – the only three in which gambling is permitted – to expand their range of games beyond craps, blackjack, poker, roulette and slot machines. The amendment would also lift the $100 cap on individual stakes, which has been in place since a 2008 referendum (that also saw craps and roulette legalized).
These (unspecified) new games and higher bet limits would come into force from 1 May 2021, if passed through the referendum. While this would increase tax revenue for each city, which would then be allocated to community colleges, opponents have warned that it could cause a spike in problem gambling.
Next is Amendment C, the Charitable Bingo and Raffles Amendment. It would reduce the number of years a nonprofit would have to have been in operation from five to three. Those running the games could also be paid – provided it is no more than minimum wage – if it passes, and would not have to be members of the nonprofit.
Of course, there is more at play than on the ballot; perhaps most intriguing is the prospect of federal legislation, which could be given a boost – despite widespread industry and state opposition – should the Democrats take the Senate.
That would make Chuck Schumer the Senate Majority Leader, a lawmaker who previously developed the Sports Wagering Market Integrity Act with Utah Senator Orrin Hatch in 2018.
That bill would have made individual states have sports betting regulations approved by the Department of Justice, and set out blanket controls, such as mandating the use of geolocation technology. Betting on amateur sports, with exceptions for the Olympic, Paralympic Games and Pan-American Games, as well as certain collegiate sports, would have been banned.
A federal self-exclusion database would also have been created, funded by the 0.25% excise tax on sports betting stakes, with money raised through that levy also used to fund problem gambling treatment.
The industry reaction to the proposal was unanimously negative, and ultimately the Sports Wagering Market Integrity Act failed to progress to a committee.
However, Hatch’s replacement in the Senate, former Presidential candidate Mitt Romney, appears to have taken up the federal regulation cause from his predecessor. In September last year Romney’s office confirmed to iGB North America that the Senator was in discussions with Schumer over a similar proposal, though this has not yet progressed to a full bill.
For readers looking for more on the election, there will be a live discussion ahead of this year’s Sports Betting USA Digital, led by Global Market Advisors’ Brendan Bussman on November 5.
Joining Brendan for the session will be MGM Resorts’ Ayesha Khanna Molino; FanDuel’s Stacie Stern; John Pappas of Corridor Consulting and Brianne Doura-Schawohlf from EPIC Risk Management. Register now to book your place.