Sports Betting Bills To Watch After First Month Of 2020

The first month of 2020 brought a flurry of sports betting legislation to statehouses. There are now 16 states considering legalizing sports betting for the first time and several more are considering expanding their existing laws. This comes after eight states began taking bets in 2018 and 12 states plus Washington, D.C., and Puerto Rico passed legalization bills in 2019.

Some of the class of 2020 seem like sure bets, led by Virginia and Maryland, the two remaining Mid-Atlantic jurisdictions without sports betting bills on their books. Others are far less likely, because of stakeholder complexities (California and  Florida) or political inclinations (Nebraska and Vermont).

Here are three states to watch in the coming months that would not only change sports betting within their borders, but across the country.

New York Tries Mobile (Again)

There may be not more consequential piece of sports betting legislation in the country than a bill to permit mobile wagering in New York. It's the nation’s fourth-most populated state and home to its largest metropolitan area, so mobile wagering in the Empire State would open a massive new sports betting customer base and bring with it unprecedented exposure to the industry.

Sports betting backers in the New York State Legislature are pushing for mobile sports betting in 2020 after similar efforts failed each of the past two years. New York’s four upstate commercial casinos, as well as its gaming facilities on sovereign tribal land, are all eligible to take in-person sports bets. But months after these casinos began taking bets, they have combined for just a small fraction of the $15 billion wagered legally since the Supreme Court struck down the federal betting ban.

That’s why mobile is so critical to New York sports betting. Industry analysts project more than 90 percent of the state’s sports betting handle would come online if legalized. That could mean billions of dollars in handle annually, and several hundred million dollars in taxes for the government.

To New York Gov. Andrew Cuomo, those hundreds of millions aren’t worth the effort. The governor has largely dismissed mobile sports betting as a “rounding error” in the state’s $177 billion annual budget, and didn’t include digital wagering dollars in his most recent proposal. Cuomo, a Democrat, has considerable sway over the Democrat-controlled State Legislature, and leadership has largely followed his lead by pushing mobile sports betting legislation on the backburner.

That hasn’t stopped supporters, most notably Sen. Joseph Addabbo in the Senate and J. Gary Pretlow in the Assembly. Addabbo has, again, pushed a mobile betting bill out of the Senate Committee on Racing, Gaming and Wagering and on to the Committee on Finance. From there it faces many of the same hurdles, particularly in the Assembly, that derailed the same measure last year.

Still, the sheer magnitude of a possible New York mobile sports betting bill makes it a key proposal to follow this spring.

Missouri Considers Royalty Fees

Online sports betting in New York could be the best news yet for the national market. Two proposals in Missouri could set the market in the opposite direction.

The Missouri House and Senate are considering bills that would mandate sports betting operators give 0.25% of handle to the leagues that organize the events. The off-the-top fee doesn’t seem like much, but in a low-margin industry such as sports betting, any extra fee could have a devastating impact on operators’ bottom lines.

Not surprisingly, gambling interests have fought vociferously against the royalty fee mandate in every statehouse. Lawmakers were understandably skeptical to begin with. The fees for the leagues mean less revenue going to state coffers. Not surprisingly, none of the 22 jurisdictions taking bets or set to do so have included royalties in their legislation.

The leagues had largely abandoned the royalty fee requests, which they pitched as a means to ensure their games’ integrity and as a fair compensation for the product they produced. Stakeholders (and many lawmakers) dismissed that appeal, arguing that sports betting has gone on for decades illegally and opening regulated, licensed and better monitored markets would do little to corrupt the competitions themselves. Others went so far as to call the leagues hypocrites after they had worked for decades to try to stop legal sports betting, but then began asking state governments and gambling operators for money once it became legal nationwide.

That hasn’t been the case in Missouri. Lawmakers spearheading sports betting in both chambers are pushing the bills, royalties in all, and the House bill has already passed out of its initial committee. There’s no guarantee the league fees will remain in the legislation, or if sports betting will pass at all, but Missouri’s bills pose a dangerous precedent for the industry and the dozen-plus other states considering sports betting bills in 2020.

Kansas Weighs Competing Factions

Missouri’s western border neighbor is considering sports betting without league royalties, but its legislation could also shape the trajectory of 2020.

Like most states that have considered bills, Kansas is weighing competing gaming interests. Lawmakers are relatively comfortable with the concept of sports betting, but the decision on who can offer bets is causing divisions.

A Senate bill introduced last week would allow the state’s four commercial casinos to take mobile and retail sports bets. In an unusual provision, the bill would also allow the Kansas Lottery to have online licenses if two or more casinos chose to do so.

This could be an unusual compromise for a state gaming market that already has an odd relationship between the lottery and its role in regulating the casinos. This has also caused division between the two camps: the casinos, not surprisingly, want autonomy to offer bets without the lottery, while the lottery is seeking a greater role in its ability to take wagers.

Even after a multi-day hearing earlier this week, divisions remain. If Kansas legislators can find a compromise, it could be a path for other legislators nationwide, several of which must balance casinos, lotteries, Native American tribes, horse tracks and other gaming entities within their own states.

If not, Kansas could fall to the wayside as up to a dozen states (including Missouri) start taking bets first.

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