Gambling in the USA
Sports Betting Kicks Off in Several States as Football Season Gets Underway
UNLV gaming law expert weighs in on the current landscape of legal sports wagering and what the future holds.
September’s arrival coincides with the beginning of a major pastime in the lives of Americans: football.
‘Tis the season for fans to not only cheer for and cry over their favorite teams, but to make wagers on them, too.
The opportunity to bet on football teams has expanded dramatically in the past year, with more and more states legalizing and launching sports wagering markets. It’s the result of a U.S. Supreme Court decision in May 2018 to overturn the Professional and Amateur Sports Protection Act (PASPA), also known as the Bradley Act.
Since then, several states have joined Nevada — the only state that previously operated full-scale, legal sports betting — in allowing their residents to bet on sporting events. But there’s even more to come.
Jennifer Roberts, associate director of the International Center for Gaming Regulation at UNLV, gives a snapshot of where Americans can legally place wagers, and what the future holds for an industry that’s nascent in much of the country.
What does the current sports betting landscape look like?
There are 12 states with active, legally regulated sports betting, and several other states, along with Washington D.C., that have made sports betting legal, but haven’t yet launched their programs.
I estimate that within five to 10 years of PASPA being struck down, sports betting will be legalized in at least 30 states. I wouldn’t be surprised to see nearly every state — perhaps with the exception of Utah — eventually adopt some version of sports wagering.
Massachusetts and Michigan are currently talking about it, and Louisiana nearly passed legislation this year. There are several states that I expect to propose legislation in upcoming legislative cycles. Prior to the Supreme Court decision, Nevada was the only state that had full-scale, legal sports betting.
What’s the reason that a state might want to jump in? What should states take into consideration before making sports betting a legal enterprise?
I think generating revenues is a piece of it. Employment is another aspect, and of course, fighting the illegal market. It’s better to have it open and transparent than maintain it in an illegal market.
Before states consider taking the plunge, they need to understand how sports betting works. That’s the key. Many states approach this new enterprise thinking that it’s going to solve budget woes, but that’s likely not the case.
In Rhode Island, for example, lawmakers there projected sports betting revenues of $11.5 million, but only about $150,000 came in over the first several months. In Nevada, sports wagering makes up 2.5 percent of gaming revenues — a very small portion. That’s because, while we might have a large amount of money being wagered, operators also have to pay out winning wagers. Sports betting is all about managing risk — you don’t want to take wagers on things where you’re going to lose a lot of money. The New England Patriots’ Super Bowl victory, for example, cost Rhode Island nearly $1.2 million in payouts. In Nevada, sports books lose $10 million on Sunday NFL games, but they win quite a bit of money on college basketball. States, overall, need to have a realistic understanding and approach to sports betting.
It’s also important for states to keep in mind that fighting the illegal market is not easy. It’s always going to be a battle over convenience, pricing, and access to credit. But the advantages of a legal market outweigh those of an illegal market. In a legal market, patron funds are safe and secure, and there are greater consumer protections. In a regulated system, sports wagering is more likely to be done honestly and fairly, and you can also provide problem gambling messaging.
If I want to open a sports book within a state that allows legal sports betting, what should I know?
Sports betting looks a little bit different in each state. Some states, for example, do not allow wagering on college games within their boundaries. Some states are going to focus on mobile platforms, and other states are not going to allow mobile betting at all. Some states operate sports betting through a lottery system, and others operate it through a casino. So, it’s really varied across the U.S.
Working within the boundaries that each state sets up can be especially challenging if you’re an operator with locations in multiple jurisdictions. In that case, you’re going to have to operate differently in each state, and pay attention to how the tax rates differ.
It’s also important for operators to communicate and share information between states. In Nevada, our legal sports books have an interest in protecting against betting corruption, and will notify our regulators if they see anything suspicious. It’s important to avoid silos so that the integrity of the market is protected everywhere.
How will the sports betting market change and grow over the next few years?
There is likely going to be a push to include more and more non-traditional sporting events in the legal betting market. One major example of this is minor league baseball. Earlier this year, Nevada sports books began taking wagers on the Las Vegas Aviators after the Nevada Gaming Commission repealed a rule that prohibited betting on professional baseball games. Sports betting is also expanding to tennis, golf, international hockey, WNBA, Australian rugby, cricket, cycling, and even college lacrosse.
Betting on non-sporting, international and esports events is also growing in the U.S. New Jersey, for example, offered wagering on the Academy Awards for the first time this year, and Nevada allows people to make wagers on the World Series of Poker and has approved wagering on Golden Tee tournaments. New Jersey was also approached about doing the Nathan’s Hot Dog Eating Contest, but they declined to do it.
In the future, it’s also possible that the location of sports books will expand. Washington D.C. will likely allow sports betting in sports arenas and the NBA recently announced a virtual sports betting platform. It will be very interesting to see how this all plays out, especially as global markets are seeing more restrictions and compliance penalties.
About the Expert:
Jennifer Roberts is an expert in sports betting, gaming regulation and law, gaming compliance, and casino operations. She serves as the associate director of UNLV’s International Center for Gaming Regulation, which conducts cutting-edge research and regulatory evaluation in order to promote international best practices in gaming regulation. Roberts also teaches courses in gaming law at the William S. Boyd School of Law at UNLV.
The three Detroit casinos reported $109.44 million in monthly aggregate revenue (AGR) for the month of April 2024, of which $107.87 million was generated from table games and slots, and $1.57 million from retail sports betting.
The April market shares were:
- MGM, 46%
- MotorCity, 30%
- Hollywood Casino at Greektown, 24%
Monthly Table Games, Slot Revenue, and Taxes
The casinos’ revenue for table games and slots for the month of April 2024 decreased 1.6% when compared to the same month last year. April’s monthly revenue was 11.8% lower when compared to the previous month, March 2024. From Jan. 1 through April 30, the Detroit casinos’ table games and slots revenue decreased by 1.6% compared to the same period last year.
The casinos’ monthly gaming revenue results were mixed compared to April of last year:
- MGM, down 0.7% to $49.86 million
- MotorCity, down 4.5% to $32.68 million
- Hollywood Casino at Greektown, up 0.6% to $25.33 million
In April 2024, the three Detroit casinos paid $8.74 million in gaming taxes to the State of Michigan. They paid $8.88 million for the same month last year. The casinos also reported submitting $12.8 million in wagering taxes and development agreement payments to the City of Detroit in April.
Monthly Retail Sports Betting Revenue and Taxes
The three Detroit casinos reported $15.28 million in total retail sports betting handle, and total gross receipts were $1.57 million for the month of April. Retail sports betting qualified adjusted gross receipts (QAGR) were up by $1.5 million in April when compared to the same month last year. Compared to March 2024, April QAGR was down by 1.7%.
April QAGR by casino was:
- MGM: $475,492
- MotorCity: $516,812
- Hollywood Casino at Greektown: $578,131
During April, the casinos paid $59,362 in gaming taxes to the state and reported submitting $72,554 in wagering taxes to the City of Detroit based on their retail sports betting revenue.
Fantasy Contests
For March 2024, fantasy contest operators reported total adjusted revenues of $494,162 and paid taxes of $41,510.
CogniPlay has today announced the official launch of their new software product, which aims to provide a robust online sweepstakes or social gaming platform to their clients.The system is designed to be modular, allowing customers to tailor their brand and offering to what they believe will give them optimal performance.
The rise of sweepstake casinos in the US is continuing to gather pace and many companies from real money gaming are investigating the business model and the potentially lucrative revenue opportunity. With no standout platform solution currently on the market, CogniPlay looks to serve clients a full white label style solution with every detail taken care of. Brands like Chumba and Pulsz are already seeing tremendous success and CogniPlay gives an extremely efficient route to market for potential new sweepstake casino owners.
The CogniPlay system has several key integrations which help to deliver the product, including games integrations with the likes of Pragmatic Play, BetSoft, Mascot Gaming and many more, giving them 100s of games for their clients. There are other integration options for their customers to pick from too, including affiliate programme software, CRM platforms and associated products, KYC, ID verification, Geo-IP systems, Gamification, and customer support.
They also have a very long and extensive development pipeline which will see the product offering develop at pace, giving clients an extensive list of options and USPs, and of course giving players a great user experience as a result.
As well as the platform itself the CogniPlay team, due to their considerable experience, also offer a whole host of managed services, with almost a menu that clients can choose from to fill any gaps in their own skillsets or experience.
It is also this experience that CogniPlay hopes to utilise to great effect to provide industry-leading client management to build successful relationships and partnerships with their clients. CogniPlay’s Chief Executive Officer Allan Turner said, “We are very proud to take the CogniPlay product to market and are excited that people who want to start a new social or sweeps brand can get in touch with us to see what we can do for them, or in fact established brands that are unhappy with their existing provider.
Our underlying principles are that we want to provide the most flexible platform in the space, to enable our clients to create the product they want to have, not for us to dictate the product to them. The two other main areas of focus are that we want to be the most future-proof product on the market with plans for any regulatory or legal changes that may arise in the future, and that we have all the right safeguards in place to ensure that we look after both our clients and players with our responsible gaming setup.
This of course means having the right tech and processes in the key areas of KYC, Geo-IP tech, anti-money laundering, fraud, risk assessment and ID verification.”
Gambling in the USA
XSOLLA RELEASES QUARTERLY INSIGHTS REPORT ON THE FUTURE OF GAMING AND GAME DEVELOPMENT: A PRELIMINARY ANALYSIS OF SPRING 2024 METRICS AND UPCOMING TRENDS
Key trends include the fast-growing mobile gaming segment, the impact of recent regulations, the integration of blockchain and AI, and the investments in equity and inclusion across the gaming industry.
Xsolla, a global video game commerce company, published the Spring 2024 edition of “The Xsolla Report: The State of Play” today. Launched on the heels of the Game Developers Conference (GDC) 2024, this extensive report provides invaluable insights into the emerging trends and pivotal shifts impacting the gaming industry in the short and long term. It sets the stage to significantly shape the future of mobile gaming, deepen academic connections within the gaming ecosystem, and redefine investment patterns.
In an era where mobile gaming commanded a 49% share of the global market in 2023, this edition of “The State of Play” sheds light on the evolving landscape of mobile gaming. The report navigates through the advancements in global compliance and regulation, including the Digital Markets Act in Europe’s new player engagement strategies, offering a glimpse into the potential future of mobile gaming monetization and distribution. It discusses the impact of cross-platform play and the importance of innovative monetization models, providing actionable insights for developers and industry stakeholders.
“The State of Play” emphasizes the importance of academia in the growth and diversification of the gaming industry. It explores how educational programs and initiatives develop talent and promote diversity and inclusivity within the gaming community. This edition underlines the symbiotic relationship between the gaming industry and academic institutions, highlighting programs that significantly impact students and the industry.
Berkley Egenes, Chief Marketing and Growth Officer at Xsolla, comments: “As we introduce the latest edition of ‘The State of Play,’ we’re not merely sharing industry insights but advocating for a transformative vision: Equal Access for Everyone. This initiative goes beyond our commitment to innovation and growth within the gaming industry. It’s about breaking down barriers to ensure that every developer, regardless of company size, has the opportunity to showcase their creativity and reach a global audience. Our focus is on providing platforms and tools that foster creative opportunities, international exposure, and the development of unique projects, ensuring that the future of gaming is accessible to all. We aim to empower every player and developer worldwide, ensuring the gaming landscape is as diverse and dynamic as its community.”
The report offers an in-depth analysis of the gaming industry’s current investment climate, including funding trends, mergers, and acquisitions. It outlines the shifts in investment patterns, from the heights of the pandemic-induced boom to a more measured approach in 2024. “The State of Play” provides a roadmap for navigating the industry’s financial aspects, offering insights into strategic investment opportunities and forecasting future trends.
Featuring expert commentary from industry voices like:
- Mukul Aurora, Co-founder of Appsoleut Games;
- Mariusz Gasiewski, CEO of Mobile Gaming and Apps Lead at Google;
- Karla Reyes, Founder and Studio Director,
Anima Interactive, the Xsolla Report: The State of Play is now available for complimentary download. To secure your copy and gain invaluable insights into the gaming industry, visit our website.
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