California, Texas, Florida, and New York are home to a combined 109.8 million people at last count, almost exactly one-third of the total U.S. population.
That’s a whole lot of people to potentially add to the list of citizens with access to legal mobile sports betting.
Heading into 2021, you could probably have gotten plus-money on a wager that any one of those states would push online wagering across the finish line this year. Any two parlayed together could have produced a massive windfall. As Brendan Tinnelly, an Ireland-based gaming industry marketing manager, tweeted on April 23, “As recently as February, I was reading analyst reports expecting NY to come online in 2024 and Florida after 2025.”
Now, New York is expected to have online betting by the next Super Bowl, Florida has a signed gaming compact that is theoretically poised to make sports betting legal, and even Texas and California are making longtime pessimists perk up — especially with developments in New York and Florida suggesting that stalled momentum can un-stall on a dime.
Any of these four states would be a complete game-changer for the mobile betting business. But there’s pushback against the excitement in each state. Here’s a rundown of the latest in the four most populous states — in reverse-size order, which might also be likelihood-of-legal-mobile-wagering order.
New York: It’s happening, but …
Brick-and-mortar sports betting is already available in New York (though not within easy driving distance of NYC), and mobile wagering is coming, probably early in 2022.
The trick is figuring out what it’s going to look like — and how suboptimal Gov. Andrew Cuomo’s version of online sports betting is going to be for consumers.
Addressing the first topic, the New York State Gaming Commission asked and answered 92 questions last Friday, hoping to provide clarity on a plan that initially left even the most astute industry analysts confused. And there remains confusion about what exactly a “platform provider” is and how many operators will ultimately get into the New York market. The initial draft of the regulations is expected to be made public by early July, and the hope is we’ll all be able then to wrap our minds around what NY mobile sports betting is going to look like.
But for now, the belief is widespread that New York is not going to replace neighboring New Jersey as the shining example of how to regulate sports gambling.
“This doesn’t appear to be the most consumer-friendly framework,” Eilers & Krejcik Gaming analyst Chris Grove told the New York Daily News this month. “I believe there was a strategic ambiguity designed to leave a fair amount of doors open. It doesn’t make clear who all of the winners and losers will be.”
While Cuomo’s plan has its shortcomings from the bettors’ point of view, with New York asking operators for 50-55% of gross revenue the state is poised to do well from a tax-collecting perspective.
Bottom line: New York will have mobile sports betting, probably by the 2022 Super Bowl, with fewer sportsbooks than New Jersey but with a sufficient number that those gamblers currently placing bets with offshore operators might consider changing their routine.
Florida: Legal challenges await
Late last week, the Sunshine State went from “sports betting is a pipe dream” to “sports betting is coming” pretty much overnight. But legal experts quickly chimed in to opine that the truth lies somewhere between the two extremes.
Conventional wisdom said sports betting wouldn’t happen in Florida until the state and the Seminole tribe came to an agreement. Gov. Ron DeSantis and Seminole Tribe Chairman Marcellus Osceola did indeed come to an agreement. But as gaming law expert Daniel Wallach told the Florida-based radio show Miller and Moulton (and anyone else who will listen), the announcement of this compact is merely a prelude to a potentially drawn-out legal battle.
“You create a compact that crafts out a monopoly for the tribe, it’s going to end up in court, it’s going to end up in litigation,” Wallach insisted. “This structure that Gov. DeSantis and the tribe have agreed to is fundamentally and legally flawed, it will be struck down, and it could leave the state of Florida in a position where you’re waiting a year or two years to get gaming. It kind of sets back the process two years while we’re fighting it out in court.”
Wallach believes that by going through the Seminole tribe to create a sports betting framework, the deal is governed by the Indian Gaming Regulatory Act (IGRA), which allows gaming only on tribal land — which literally means the betting has to take place on tribal land, not through servers located on that tribal land.
Federal courts have rejected the use of common law contract principles (i.e., offer, acceptance, and consideration) to determine the location of the bet for purposes of IGRA's "on Indian lands" requirement.
This compact will flunk federal court scrutiny.
Not even a close call. pic.twitter.com/AOIyEhHv6J
— Daniel Wallach (@WALLACHLEGAL) April 26, 2021
In short, either new U.S. Secretary of the Interior Deb Haaland will reject the compact, in whole or in part, or a competitor to the Seminole tribe hoping to offer sports betting in Florida will file suit in federal court.
As SportsHandle’s Brett Smiley said on Wednesday’s episode of the Get a Grip podcast, the compact “is very much favorable for the Seminoles because they have the state of Florida by the proverbial balls.” What Wallach and other legal experts believe, though, is that the state could be headed for brick-and-mortar-only sports betting on Seminole land while mobile hopes bounce around in legal limbo a while longer.
Bottom line: Florida might not be any closer to regulated online sports betting than it was at the start of the year. The next step is to see whether the Florida legislature signs off on the deal, setting off the likely legal challenges, or rejects it and forces DeSantis and the Seminole tribe to craft something less monopolistic.
Texas and California: At least they’re talking about it
On the one hand, neither Texas nor California is a realistic threat to legalize mobile sports betting in 2021.
On the other hand, a lot of experts were saying the same about New York and Florida a few months ago.
Nevertheless, let’s reiterate: Neither Texas nor California is a realistic threat to legalize mobile sports betting in 2021. But advancement toward such developments becoming realistic is afoot.
In Texas, state Rep. Dan Huberty put together a sports betting bill and presented it at a public hearing this month. It’s an uphill climb, though. Such a bill requires a two-thirds vote of lawmakers because the Texas Constitution currently bans most forms of gaming, and then it would be put before voters. The Texas legislative session ends in May and doesn’t resume until 2023.
Meanwhile, in the most populous state in the nation, California, there’s faint hope for legalization in 2021, though mobile wouldn’t be a part of it initially.
If there’s a recall election in November, there’s a chance a sports betting referendum could get on the ballot. 2022, however, remains the minus-money favorite for when a referendum will be put before voters.
Bottom line: In Texas, it’s a case of “never say never,” but sports betting is probably at least two years away. In California, it’s a lot messier, with a high likelihood of tribal and non-tribal interests clashing. As far as mobile sports betting goes, Cali is probably the furthest away of the Big Four.
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