{"id":119760,"date":"2019-07-21T09:10:31","date_gmt":"2019-07-21T16:10:31","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/?p=119760"},"modified":"2019-07-21T15:19:08","modified_gmt":"2019-07-21T22:19:08","slug":"biggest-mistake-made-state-legalized-sports-wagering-part-ii","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/","title":{"rendered":"The Biggest Mistake Made by Each State in Legalized Sports Wagering – Part II"},"content":{"rendered":"

In Part I of this discussion I set down a list of the biggest mistakes each state has made so far on the path to legalizing sports wagering. The goal here is not to shame a state for being progressive enough to offer legal sports wagering. Instead, the goal is to encourage new states to learn from past mistakes to create a better product for everyone. Part II explores mistakes made by states which have legalized betting but haven’t yet taken their first wager. Again, in chronological order of legalization, we’ll start with Arkansas.<\/p>\n

 <\/p>\n

Arkansas:\u00a0In-Person In-State Wagers<\/h5>\n

Arkansas voters approved sports betting via referendum in November 2018. However, progress on actual wagering has moved very slowly. Oaklawn Racing in Hot Springs has just begun taking wagers (technically, Arkansas could have been included in Part I); however, there’s no timetable for betting at Southland Racing in West Memphis. Nor is there any plan for when the state’s two casino expansion licenses will be awarded. The oddest quirk of Arkansas law is a stipulation that any wager on a sporting event occurring within the state must be made in-person. Given the digital footprint of an online wager versus the anonymity of a small over-the-counter wager, it seems backwards.<\/p>\n

 <\/p>\n

Washington DC: Unrealistic Expectations<\/h5>\n

The Washington DC City Council passed sports betting in early 2019, but not without controversy. First, it chose a single vendor system for the general city contract. Additionally, it chose that vendor, Intralot, without taking any competitive bids or initiating a public RFP process. Moreover, Intralot cited wholly unrealistic revenue numbers in its proposal. How unrealistic? Well, to achieve the 15% hold it promised, the District would have to offer a product with games lined at -145\/-145 on either side. Perhaps they think they can achieve that hold by offering lousy parlay odds and making everything a parlay.<\/p>\n

Either way, it\u2019s bad for consumers and DC City Council passed the bill into law with little opposition. Later it came to surface that the main proponent of the bill, Jack Evans, runs a consulting firm that has as its main client, yep, Intralot. As a result, the FBI is investigating Jack Evans.<\/p>\n

 <\/p>\n

Montana: Lots of Land, Not a Lot of Options<\/h5>\n

The Montana legislature crafted two different sports betting bills and then let the governor decide which one he liked. The first bill authorized the state\u2019s lottery to run sports betting via a single vendor setup similar to Delaware and Rhode Island. The Montana Lottery chose Intralot. The other bill allowed for competition by authorizing wagering in bars and taverns that hold gaming licenses in the state. Governor Bullock decided that competition would not be healthy for the growth of Montana sports betting. He explained he will entertain the idea of sports wagering in bars and taverns again in two years. For now, Montana residents will be restricted to whatever product Intralot devises for them.<\/p>\n

 <\/p>\n

Indiana: No Wagering on eSports<\/h5>\n

Ok, I\u2019ll admit that finding fault in Indiana was difficult. It openly admitted that it drew much of the structure of its sports wagering bill by looking at what worked and didn\u2019t work in other states. As a result, Indiana has a pretty fair and balanced setup for both operators and customers. There’s a low tax rate (9.5%) and a moderate $100,000 license fee. Mobile betting is allowed and physical sports books are permitted at state casinos, racetracks, and off-track betting parlors. Betting is permitted on NCAA teams despite also being the home to NCAA headquarters in Indianapolis. So my one gripe would be that it banned wagering on eSports. While it seems odd to many, the fact is eSports (video games) are quickly becoming popular spectator sports and it’s only natural for wagering to follow.<\/p>\n

 <\/p>\n

Iowa: In-person Registration Through 2020<\/h5>\n

Iowa got it mostly right. It offers an operator-friendly tax rate (6.75%) and license fee ($45,000). Each of the state\u2019s 19 casinos can have up to two online skins. It also permits mobile wagering. However, an odd clause requires account registration for mobile to be done only in-person through the end of 2020. This simple and unnecessary inconvenience will hinder Iowa\u2019s revenue potential. Still, there\u2019s plenty to like about Iowa, so it\u2019s not a major misstep.<\/p>\n

 <\/p>\n

Tennessee: Official Data Mandate<\/h5>\n

Tennessee hopes to take its first sports wager sometime this fall. It\u2019s ambitious for a state that does not have any casinos or racetracks. It will offer a completely online\/mobile product. As a result of not having to cater to an existing casino lobby, Tennessee could position itself to be a real innovator in the sports betting industry. However, that doesn\u2019t mean the Tennessee legislature did not cave to some lobbying pressure on the bill. Late in the process it added open-ended language that requires sports book operators to use official data from whatever sport they book. Without any regulations as to the scope or limits, it creates a situation where leagues can extort operators in Tennessee. They\u2019ll be forced to pay whatever price the leagues determine for official scores and data. That could get ugly fast.<\/p>\n

 <\/p>\n

Oregon: Single Vendor Model<\/h5>\n

Oregon was one of the states grandfathered from PASPA due to a lottery-based parlay game it ran many years ago. Lawmakers in Oregon have decided to bring a form of that back with the Oregon State Lottery Commission running the product and European sports book provider SBTech providing the technology. It\u2019s unclear if it will be single-game betting or a parlay system. It\u2019s also unclear if residents will be able to bet mobile or at lottery retailers. Everything was going smoothly until a bill was introduced in late May banning the lottery from offering games that can be played online or through a mobile device. Either way, it’s likely that Oregon will be a repeat of what we\u2019ve seen in Delaware and Rhode Island, along with other states that employ a single vendor. Lack of competition inhibits innovation and technology growth.<\/p>\n

 <\/p>\n

Illinois: Online Penalty Box<\/h5>\n

Illinois was a late and unexpected addition to the 2019 wave of sports betting legislation. Much of their bill came together very late in the session but was passed overwhelmingly. It is a wide-ranging legalization which permits wagering at casinos, racetracks, OTB\u2019s, and even sports venues in the state. There will also be mobile betting. Additionally, the lottery gets a piece for their 2,500 locations in the state, but they\u2019ll have to compete against everyone else.<\/p>\n

Well, almost everyone. The Illinois law has three licenses for purely online entities (untethered to an existing casino or racetrack), however, those licenses will have to wait 18 months behind the casinos and racetracks. It is a move that specifically targets the DFS giants of FanDuel and DraftKings. However, they also have the deep pockets to buy their way into an existing casino or racetrack as their sports betting operator. In the end, this penalty box hurts innovative startups who may have a good product, but are unable to find a casino to partner with.<\/p>\n

 <\/p>\n

New York: Can\u2019t Get Out of It’s Own Way<\/h5>\n

New York authorized sports wagering at commercial and tribal casinos in the state. However, the nearest of those casinos is 100 miles from the densely populated New York City area. Wagering has started at the casinos, but the traffic won’t be substantial. A true comprehensive sports betting law permitting wagering at New York City area racinos, and more important, via mobile, has been caught up in politics in Albany for over a year now. New York is one of the great potential Shangri-La\u2019s of sports betting. A heavily populated sports-crazed state. However, without a product close to the population base, those bettors continue to stream across the bridges and tunnels into New Jersey to wager. Perhaps in 2020, New York will get it right. Until then, New Jersey will continue to reap the benefit.<\/p>\n

 <\/p>\n

New Hampshire:\u00a0Negotiated Tax Rate Could Cause Issues<\/h5>\n

New Hampshire is the\u00a0most recent state, as of this writing, to legalize sports betting. The oddity in\u00a0its law, beyond setting a legal betting age of 18, is the effective tax rate. Technically, it’s termed a revenue share, but it will be set via a competitive bidding process. The state will award 15 licenses\u00a0— 5\u00a0retail and 10 online. The chosen operators will negotiate a revenue share with the state lottery. New Hampshire is expecting $11.25 million in revenue by 2021 from sports betting.<\/p>\n

That’s very close to the $11.5 million that Rhode Island budgeted to make in a state where the effective tax rate is 51%.\u00a0Furthermore, that $11.5 million was a revised number from an initial $23.5 million. However, Rhode Island is\u00a0on pace to make\u00a0only about $3 million in the first year. New Hampshire has a population about 30% larger than Rhode Island and will have mobile. Still it would seem that if New Hampshire wants to meet its\u00a0budgetary numbers, it will have to negotiate a much higher tax rate than operators are comfortable paying.<\/p>\n

 <\/p>\n

Future States<\/h5>\n

There are other states nearing the finish line of legalized betting but we’ll save them for future columns. Lawmakers in Maine sought to create a nearly free-market system of sports betting with low barriers to entry. However, the governor opted not to sign that\u00a0bill into law. North Carolina is poised to legalize betting, but only at the two Cherokee casinos with no mobile betting access. As the song goes, “it’s all just a little bit of history repeating.”<\/p>\n

 <\/p>\n

In Summary<\/h5>\n

 <\/p>\n

Finding nits to pick in 17 states and one district might make you believe I think legal sports betting is a flawed concept. In truth, I think this is the golden age of sports betting. I\u2019m extremely optimistic that with each mistake and misstep the industry gets closer to getting it right down the line. Innovation and new developments will continue to push the old tired ideas aside. The best ideas in the market haven\u2019t even been thought of yet. States that encourage growth, competition, and capitalism will help ensure this golden age continues for years to come.<\/p>\n

As always, if you agree or disagree or want to ask a follow-up question, use the comment section below. I look forward to discussing this list further.<\/p>\n\"Facebook\"<\/a>\"twitter\"<\/a>\"youtube\"<\/a>\"instagram\"<\/a>","protected":false},"excerpt":{"rendered":"

In Part I of this discussion I set down a list of the biggest mistakes each state has made so far on the path to legalizing sports wagering. The goal here is not to shame a state for being progressive enough to offer legal sports wagering. Instead, the goal is to encourage new states to […]<\/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":[1894,522,728,1831,1875,1940,1934,121,1869,133,1870,1941,1939,1938,1804,174,1933,1935],"yoast_head":"\nThe Biggest Mistake Made by Each State in Legalized Sports Wagering - Part II - 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-ii\/\" \/>\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 II - Gambling With An Edge\" \/>\n<meta property=\"og:description\" content=\"In Part I of this discussion I set down a list of the biggest mistakes each state has made so far on the path to legalizing sports wagering. The goal here is not to shame a state for being progressive enough to offer legal sports wagering. Instead, the goal is to encourage new states to […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/\" \/>\n<meta property=\"og:site_name\" content=\"Gambling With An Edge\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/lasvegasadvisor\" \/>\n<meta property=\"article:published_time\" content=\"2019-07-21T16:10:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-07-21T22:19:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/uploads\/2018\/10\/capt-jack-andrews.png\" \/>\n\t<meta property=\"og:image:width\" content=\"420\" \/>\n\t<meta property=\"og:image:height\" content=\"275\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@lva_tweet\" \/>\n<meta name=\"twitter:site\" content=\"@lva_tweet\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/#website\",\"url\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/\",\"name\":\"Gambling With An Edge\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/uploads\/2018\/10\/capt-jack-andrews.png\",\"contentUrl\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/uploads\/2018\/10\/capt-jack-andrews.png\",\"width\":420,\"height\":275},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/#webpage\",\"url\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/\",\"name\":\"The Biggest Mistake Made by Each State in Legalized Sports Wagering - Part II - Gambling With An Edge\",\"isPartOf\":{\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/#primaryimage\"},\"datePublished\":\"2019-07-21T16:10:31+00:00\",\"dateModified\":\"2019-07-21T22:19:08+00:00\",\"author\":{\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/#\/schema\/person\/c2998d6073d7df2e2da1f82ae82ac758\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/biggest-mistake-made-state-legalized-sports-wagering-part-ii\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Biggest Mistake Made by Each State in Legalized Sports Wagering – Part II\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/#\/schema\/person\/c2998d6073d7df2e2da1f82ae82ac758\",\"name\":\"Jack Andrews\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/plugins\/wp-user-avatar\/deprecated\/wp-user-avatar\/images\/wpua-96x96.png\",\"contentUrl\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/plugins\/wp-user-avatar\/deprecated\/wp-user-avatar\/images\/wpua-96x96.png\",\"caption\":\"Jack Andrews\"},\"url\":\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/author\/captain-jack\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","jetpack_featured_media_url":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-content\/uploads\/2018\/10\/capt-jack-andrews.png","jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/posts\/119760"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/comments?post=119760"}],"version-history":[{"count":12,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/posts\/119760\/revisions"}],"predecessor-version":[{"id":119823,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/posts\/119760\/revisions\/119823"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/media\/83676"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/media?parent=119760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/categories?post=119760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/wp-json\/wp\/v2\/tags?post=119760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}