This Sunday marked five years since the U.S. Supreme Court overturned PASPA and gave each state permission to legalize and regulate sports betting.
Sports Handle published a massive, thorough oral history last week, three days before the anniversary, allowing those who caused and/or were affected by the fall of PASPA to tell the story of how the Supreme Court decision came to be and how it has shaken up the gambling world since.
But several fascinating subplots were left on author Brett Smiley’s cutting-room floor, and we’re going to delve into one of them on US Bets: It’s likely legal sports betting would still be limited to Nevada today if not for Pennsylvania allowing casino gambling with the passage of the Pennsylvania Race Horse Development and Gaming Act in 2004.
The 1-2 punch of competition and recession
Richard Schuetz is an industry lifer, having worked in casino executive positions and for gambling commissions in and outside the U.S. for decades. Schuetz explained to Smiley (in previously unpublished quotes) the role Pennsylvania’s casinos played in getting PASPA overturned.
Pennsylvania first opened casinos with slot machines in 2006. In 2010, the law was adjusted to allow table games. But even before blackjack and roulette entered the equation, the veteran gambling state that borders Pennsylvania was feeling the effects.
“As a result of casino gaming being legalized in Pennsylvania, gaming revenues in New Jersey started to tank after 2006,” Schuetz explained. “The Great Recession exacerbated this, and it was just a long downhill slide for New Jersey.”
In 2014, the wheels came off — or perhaps more accurately, the padlocks came on — for Atlantic City casinos. The Atlantic Club (formerly the Hilton) closed in January. Showboat followed in August. The multi-billion-dollar blunder that was Revel closed in September, just a little over two years after opening. That same month, Trump Plaza ceased operations.
“The state involved itself in a great many things to try and stop the slide,” Schuetz said of those years from 2006 onward. “It contemplated allowing casinos to move out beyond the Atlantic City area, and they were aggressive in working to secure iPoker and iGaming in the jurisdiction. They relaxed regulatory structures to speed processes, passed a constitutional amendment within the state for betting, and passed a sports wagering act.
“They also sued the government, which morphed into the action that repealed PASPA.”
Different approaches in Nevada and New Jersey
As The New York Times wrote in its now-infamous article maligning the sports betting lobbying sector as some sort of reflection on the ills of sports betting rather than on the ills of lobbying, “In 2012, the state’s governor, Chris Christie, signed a bill to legalize sports betting. The goal was to revitalize Atlantic City, whose once-bustling boardwalk casinos were struggling.”
Schuetz added further color in his interview for the PASPA oral history: “While Las Vegas did feel the Great Recession, it was not troubled by legalization in adjoining states, and the economic damage was much less than that experienced in A.C. Las Vegas already had sports wagering and did not see iGaming as the magic pill to bring the market back, as Atlantic City did. This is why New Jersey was so much better prepared to launch into this new world of gaming.
“It fascinates me how some little historical accidents helped shape the future of the industry and some of the players. I sense that if economic events were not crushing the Atlantic City market, they may never have been as aggressive in exploring a whole bunch of alternatives — one of which was legal sports betting.”
Photo courtesy of Parx Casino