Major Sports Gambling State Developments Following Repeal of PAPSA

For the first time in decades, sportsbooks can now legally operate in every state that wishes to welcome the practice following the Supreme Court’s decision in May to strike down the Professional and Amateur Sports Protection Act of 1992 (PAPSA). Seven states have already enacted laws regulating sports betting, with many others considering legislation in the near term.

  • Delaware. Less than a month after the Supreme Court struck down PAPSA, Delaware expanded its legalized sports betting position. Delaware was already one of three other states—including Nevada, Oregon, and Montana—that had limited sports betting that was lawful under PAPSA (parlay cards). Once the Supreme Court ruled against PAPSA, however, Delaware legalized single game wagers and futures bets for certain sports. In the first 20 days following this expansion, Delaware sports gambling drove about $1 million in total revenue to the state’s three casinos, the state’s sports betting suppliers, and to the state itself.
  • New Jersey. Soon after the commencement of sports gambling in Delaware, on June 11, 2018, New Jersey Governor Phil Murphy signed into law legalized sports betting in his state. On June 14, Governor Murphy himself placed New Jersey’s first legal sports wager. During the state’s first two weeks of legal sports betting, two casinos and a racetrack saw over $16 million placed on sports bets, and captured total revenues of over $3 million. With this move, New Jersey has also joined Nevada as the only other state with operational mobile sports betting platforms.
  • Mississippi. In March of 2017—even before the Supreme Court granted the cert. petition to consider the validity of PAPSA—the Mississippi legislature passed an updated daily fantasy sports bill. Notably, the enacted law removed old language prohibiting sports wagering, effectively lifting the statewide ban on sports betting. Shortly after the Supreme Court invalidated PAPSA, the Mississippi Gaming Commission formulated regulations that set the framework for legalized in-person sports betting in Mississippi’s casinos. On August 1, 2018, casinos in Biloxi and Tunica accepted the first sports bets in Mississippi. Twelve Gulf Coast casinos have also indicated that they will have sportsbooks running in time for the football season (when an upward spike in sports betting usually occurs).
  • West Virginia. In anticipation of a favorable Supreme Court ruling on PAPSA, West Virginia lawmakers passed a sports betting bill in March of 2018 that allows in-person and online sports betting within state’s boundaries. West Virginia Lottery officials are aiming to have sports gambling platforms running by the beginning of the football season.
  • Pennsylvania. Late in 2017, Pennsylvania passed a sports betting bill with an activation clause, and the law became active once PAPSA was struck down. To obtain a Pennsylvania sports betting license, however, a casino must pay an initial $10 million fee and would face a 36 percent tax on sports betting revenues. This creates a difficult environment for casinos to operate a profitable sportsbook while maintaining favorable, market-competitive odds for bettors. It will be interesting to see if businesses will eventually pay these fees, and if the current legal framework will stay in place as neighboring states (New Jersey, Delaware, and West Virginia) see their sports gambling industry grow.
  • Rhode Island. On June 22, 2018, Rhode Island Governor Gina Raimondo signed into law the state’s 2019 budget, and that plan included language that permitted sports betting at the state’s two casinos. The budget plan, however, does not include provisions allowing mobile sports betting. Like Pennsylvania, Rhode Island intends to impose a considerable tax (51 percent of revenues). These expensive provisions might cause preexisting bettors to avoid placing legal wagers with casinos. Nonetheless, sports gambling is expected to go live at the state’s two casinos on October 1, 2018.
  • New York. In 2013, New York authorized sports gambling to commence at its commercial casinos in the event that the federal ban was lifted; and in 2016, New York also legalized the playing of daily fantasy sports. Since 2016, though, there has not been much progress made in the state. In order for the 2013 law to take effect, the New York State Gaming Commission needs to establish regulations for casinos to follow—to date, no such guidelines have been published. In June of this year, a bill that would have legalized sports betting throughout New York failed, but could be reintroduced in 2019.

While it’s unlikely that every state will embrace legal sports gambling, many other states across the country are expressing a willingness to open their doors to the possibilities that this emerging market provides. The growth in the market will undoubtedly continue, especially when state legislatures begin re-convening for new legislative terms.

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