{"id":119757,"date":"2019-07-03T16:50:10","date_gmt":"2019-07-03T23:50:10","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/?p=119757"},"modified":"2019-07-03T16:50:10","modified_gmt":"2019-07-03T23:50:10","slug":"biggest-mistake-made-state-legalized-sports-wagering-part","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part\/","title":{"rendered":"The Biggest Mistake Made By Each State in Legalized Sports Wagering – Part I"},"content":{"rendered":"

In the first year of widespread legalized sports betting in the US, we\u2019ve seen 17 states take the plunge. The states that were the first movers in this space provide a good example of how it can\u00a0be done and the profits that can be made. They also provide some examples of what mistakes future states should try to avoid. I thought it would be interesting to highlight the biggest mistake made by each state so far.\u00a0 First, let’s look at the states where you can currently place a wager. Presented in order of legalization, starting with Nevada.<\/p>\n

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Nevada: Tethering to a Casino<\/h5>\n

Nevada is far and away the industry gold standard for how sports betting can be done.\u00a0In Nevada, sports betting\u00a0is used as both a profit center\u00a0and as\u00a0a mechanism to drive traffic to casinos. That latter point may be why Nevada chose to require in-person registration to open a mobile account and in-person deposits and withdrawals. This tethering to the casino inhibits sign-ups in an age where identity verification can be done remotely with ease. Online banking may be popular, but Nevada decided that the only way they want you banking with a casino is via cash in-person at the casino. These limitations restrict the liquidity of the mobile product in Nevada.<\/p>\n

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Delaware: No Competition, No Innovation<\/h5>\n

On June 5, 2018, Delaware became the first state outside Nevada to offer full single-game wagering. At the time, many commented that tiny Delaware was eating New Jersey\u2019s lunch by beating them to market by nearly two weeks. However, the product available today over one year later is almost identical to what was available to bettors on that June day. In other words, there\u2019s been no innovation. Single-game wagering is still limited to just the state\u2019s three casinos. There’s only one approved vendor for sports betting lines in the state and there’s no mobile betting. The vendor, William Hill, has mobile betting in other states. However, given that Delaware represents just a small slice of William Hill\u2019s revenue, there\u2019s no\u00a0incentive\u00a0for sinking money into a mobile solution. If there was competition in the small state, there would have likely been a mobile product by now.<\/p>\n

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New Jersey: Afraid of NJ Colleges<\/h5>\n

New Jersey has done a lot of things right in\u00a0its first year of legalized betting.\u00a0It has a fully autonomous mobile-betting solution.\u00a0It has the most competitive market in the country. However,\u00a0it also\u00a0has a short-sighted restriction that prevents wagering on New Jersey colleges, as well as any collegiate sporting event being played in the Garden State. The clause was written in 2011 when the state first attempted to legalize sports betting via a ballot referendum. At the time, nobody knew how much the industry would advance in the following eight years — today it’s possible to track the digital fingerprint of just about every wager.<\/p>\n

It’s becoming accepted fact that legalized betting markets\u00a0bring greater sports integrity. Black markets increase the threat of match-fixing and by banning bets on NJ colleges, the state doesn\u2019t help eradicate that possibility. Unfortunately for New Jersey, the wording\u00a0that prevents wagering on New Jersey collegiate sports is now baked into the state constitution. It\u2019ll require another statewide ballot referendum to change it.<\/p>\n

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Mississippi: No Mobile in This State<\/h5>\n

Mississippi took a curious route to legalized sports betting.\u00a0It approved\u00a0daily fantasy sports wagering and inadvertently authorized sports wagering in the process. However, that law authorized wagering only at casinos. This currently prevents the Magnolia State from offering a mobile product except when the bettor is physically at\u00a0a casino. As a result, despite over 20 Mississippi casinos currently offering a sports wagering product, the revenue result has been underwhelming. Mississippi sports betting handle peaked in November 2018 at $44.5 million and has decreased each month since. February 2019 saw only $17.4 million in bets. If Mississippi was able to have the same 15\/85 split\u00a0between physical wagers and online wagers that New Jersey does, it\u00a0would likely book nine figures of betting handle\u00a0every month.<\/p>\n

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West Virginia: Confusion Reigns<\/h5>\n

West Virginia was an early adopter of sports wagering. The set-up looked pretty good. There was competition, an operator-friendly tax rate, and mobile betting.\u00a0The state\u00a0quickly had major players with William Hill and FanDuel taking up residence. However, there was also dysfunction in the capitol, as the Director of the Lottery, the de facto regulatory body in West Virginia, abruptly resigned after sports wagering became law. The Communications Director\u00a0then went radio silent. When the Governor is also the owner of the state\u2019s only stand-alone casino, there\u2019s always speculation of an uneven playing field.<\/p>\n

Things in West Virginia seemed to be going well given\u00a0its\u00a0size and population. However, in early March, one of the state\u2019s three sports book operators went dark, literally. Without warning, it\u00a0turned off the lights in the sports book and shut down\u00a0its mobile app. It took over three weeks\u00a0before\u00a0a Freedom of Information Act appeal finally revealed a dispute between vendors\u00a0was the cause of\u00a0the shutdown. Through it all, the Lottery Commission said nothing. One of the advantages for bettors in legalized sports betting is the knowledge that a regulatory body exists to resolve all disputes fairly. However, this level of confidence doesn\u2019t shine through in the Mountaineer State.<\/p>\n

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New Mexico: Lack of Any Regulations or Laws<\/h5>\n

New Mexico entered into the legal sports betting realm via the back door. The wording of\u00a0the state\u2019s compact with tribal casinos permitted the tribes to offer any Class III game, and sports betting is classified as Class III. First to market was the Santa Ana Star north of Albuquerque. Other tribal casinos\u00a0have joined in and more will follow in time. Since it’s tribal-run, there are no specific sports betting regulations managed by the state. While there’s a very small New Mexico Gaming Control Board\u00a0that oversees\u00a0compliance by tribal casinos, it’s unclear how hands-on\u00a0it is when it comes to sports betting. Dispute resolutions are the province of the tribes.<\/p>\n

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Rhode Island: Followed the Delaware Model<\/h5>\n

Rhode Island decided to copy the approach of a similarly diminutively \u00a0sized state in Delaware, settling on a single-vendor approach. However, like Delaware, it has resulted in stagnant innovation. Rhode Island has also had the unfortunate luck of having two of\u00a0its local teams reach the championship round of their respective sports in\u00a0the state’s first year of accepting wagers. The Patriots and the Bruins both received a large amount of local backing and it decreased profits significantly for the state. Rhode Island recognized\u00a0its lack of innovation, though, and pushed through a new law\u00a0that permits mobile betting in the state. It’s unlikely, however, that it will have that product up and running before sometime this fall.<\/p>\n

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Pennsylvania:\u00a0One\u00a0Skin in the Game<\/h5>\n

While much has been made of Pennsylvania\u2019s high tax rate for operators (36%) and high licensing fee ($10 million), the biggest mistake may have\u00a0been limiting the online sports books to only one skin per physical casino. Moreover, that online skin must have the same brand as the physical casino it’s associated with. In the new market for sports wagering, casino operators are increasingly not sports book operators. By limiting the number of online operators and their branding, it’s giving consumers fewer options. This limit, combined with those aforementioned high barriers to entry, make Pennsylvania far less likely to be the originator of anything innovative in sports wagering, as only the big boys will have the money and influence to buy into the Pennsylvania market.<\/p>\n

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The above list represents the eight states which are currently able to take legal sports wagers. So what about the other\u00a0nine states (and one district)\u00a0that have passed sports betting laws, but haven\u2019t yet opened for business? Did any of them get it right? I’ll look into that in Part Two of this post. In the meantime, if you think there’s a more egregious flaw than what I’ve listed, leave a comment below and we’ll discuss.<\/p>\n

 <\/p>\n\"Facebook\"<\/a>\"twitter\"<\/a>\"youtube\"<\/a>\"instagram\"<\/a>","protected":false},"excerpt":{"rendered":"

In the first year of widespread legalized sports betting in the US, we\u2019ve seen 17 states take the plunge. The states that were the first movers in this space provide a good example of how it can\u00a0be done and the profits that can be made. They also provide some examples of what mistakes future states […]<\/p>\n","protected":false},"author":26,"featured_media":83676,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[19],"tags":[1937,60,1936,728,230,776,1556,224,1777,1910,1367,1563,1804,174,1802,850],"yoast_head":"\nThe Biggest Mistake Made By Each State in Legalized Sports Wagering - Part I - Gambling With An Edge<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Biggest Mistake Made By Each State in Legalized Sports Wagering - Part I - Gambling With An Edge\" \/>\n<meta property=\"og:description\" content=\"In the first year of widespread legalized sports betting in the US, we\u2019ve seen 17 states take the plunge. 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