Connecticut Preparing For U.S. Sports Betting?
Another US state considers the possibilities
Connecticut has joined the growing number of US states mulling the possibilities of a favourable US Supreme Court ruling that could widen the estimated $155 billion US sports betting market beyond the four states permitted under the federal Professional and Amateur Sports Protection Act (see previous InfoPowa reports).
The CT Post reports this week that in mid-February the implications of a positive ruling will be discussed at a forum being organised by Rep. Joe Verrengia, co-chairman of the state Assembly Gambling committee.
House Speaker Joe Aresimowicz appears to favour the idea of Connecticut entering the sports betting market in a strictly controlled manner to raise more state revenue. He said that estimates on the tax and fees revenue the state government could collect range from $100 million to $300 million…providing Connecticut is faster off the mark than rival states.
Gambling taxes already account for more than $600 million in state revenue.
The Supreme Court decision is expected around mid-year, and a number of states have made preliminary moves to seize the initiative in the event of a positive ruling
“I would like it to be one of the first bills voted out of committee and I would like for the General Assembly to act on it quickly after that,” Aresimowicz said Monday, 16 days before the start of the 2018 legislative session. “It’s another area where if we don’t act, I’m sure neighboring states and other areas will.”
Sen. Martin Looney, the state Senate president pro-tem, is also behind the project, and told CT Post:
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“I believe that Connecticut should move very speedily ahead on sports betting if we are authorized to do so by the U.S. Supreme Court. We need additional sources of revenue.”
However, here are politicians in Connecticut who have reservations about licensing and taxing sports betting, among them Republican Senator Len Fasano, who told the CT Post:
“This is just lunacy. Just deal with the problems that you have and stop pretending that legalizing drugs and expanding gambling is the panacea.”
Despite saying that, Fasano added that he might support sports betting if it’s done carefully, not rushed. He cited numerous hurdles that would take at least three years to clear, including the state’s compact with Indian tribal casino operators.
The CT Post notes that last year the state General Assembly asked the state Department of Consumer Protection — which regulates gaming — to draft rules for sports betting as part of the approval for the East Windsor commercial casino.
The department now wants details on how to make it work, Aresimowicz said.
One option would be to bring in the tribes to run sports betting. Another would be to turn to the 16 off-track betting locations (soon to be 17 with a Danbury opening) run by Sportech, a British firm with its U.S. base in New Haven.
“We absolutely think that we’re in a good position to be involved in that,” said Ted Taylor, president of Sportech Venues.
Rep. Verrengia says he hopes to hear all opinions at the forum.
“Sports betting is very big in Connecticut right now,” Verrengia said. “I think it should be regulated and taxed.”
Verizon Exploring Possibilities Of A Wider U.S. Sports Betting Market (Update)
Giant communications company joins several US states in considering the implications of a PASPA overturn
Emulating a number of US states, the American communications giant Verizon is reportedly considering the opportunities in US sports betting if the US Supreme Court rules against the restrictive federal Professional and Amateur Sports Protection Act, enabling an expansion of the estimated $155 billion market beyond the current four states (see previous InfoPowa reports).
Sources have told media that New York-based Verizon has been meeting with experts and consultants to assess the potential for a sports-focused online gambling venture if the laws in the U.S. change. Verizon bought Yahoo and its popular sports fantasy business last year for $4.5 billion.
Responding to the publication mcall this week, Verizon Chief Financial Officer Matt Ellis said:
“There are some changes coming that we pay attention to. We stay close to that to see how it would affect our asset and how we may choose to respond.
“I’ve not looked at anything in detail. If someone has an idea around it, I’ll look at it like any other. But we are not getting ahead of ourselves there.”
An unidentified source told the publication that Verizon may ultimately decide to stay out of the intensively competitive sports betting market, but was thoroughly exploring all the options.
Gambling is a tempting potential growth market, and Verizon has the nation’s largest mobile network, with more than 100 million subscribers, along with Yahoo, which has 1.3 billion users.
Yahoo’s fantasy sports unit has tens of millions of fans who spend 30 billion minutes a year managing imaginary teams and picking players, often paying fees to participate in guaranteed prize pools, mcall reports.
Instead of trying to build a gambling business internally, Verizon could look at acquiring online sports-betting companies to speed up the process. That’s a strategy it has used in the past to get into a new line of business, such as its acquisition of Intel Corp.’s OnCue video service in 2014.
Mcall points out that Verizon also has streaming rights to some National Football League and National Basketball Association games, which opens the door to live betting alongside broadcasts, a popular offering in markets like the U.K.
Last week, when Verizon announced an expanded streaming deal with the NBA, Chief Executive Officer Lowell McAdam and NBA Commissioner Adam Silver discussed a $25 million joint investment to develop features like quarter-by-quarter fantasy betting, the publication notes.
Both Verizon and the NBA see such contests as a way to boost fans’ interest and engagement in live games.
Quoting a study by gaming consultants Eilers & Krejcik Gaming, mcall observes that a regulated U.S. gambling market would be worth as much as $15.8 billion in revenue, with 44 million customers wagering $245 billion annually.
Among the estimated black-market American punters, more than 90 percent place bets online, versus 33 percent in person.
Following the Yahoo deal, Verizon created a media division called Oath, which contains Yahoo Fantasy – for decades the most popular online service for season-long fantasy contests. In 2015, Yahoo began offering for-money daily fantasy contests. It is now a distant third in a daily fantasy sports sector dominated by DraftKings Inc. and FanDuel Inc.
Bloomberg reported last week that DraftKings and FanDuel are also likely to be considering the opportunities inherent in a positive Supreme Court sports betting ruling.
New York Senate Hearing Discusses Potential For Sports Betting (Update)
There’s a lot riding on the upcoming US Supreme Court ruling on sports betting
A New York Senate informational hearing Wednesday became the latest indicator of the widespread interest at state level in a wider sports betting dispensation, should the Supreme Court rule against the federal Professional and Amateur Sports Protection Act (see previous InfoPowa reports).
The Senate Committee on Racing, Gaming and Wagering heard an extensive range of opinions and perspectives during the hearing, which featured spokesmen for problem gambling, national sports leagues, major betting companies, the New York racing industry, and integrity in sports advocates.
In summary (and there was a great volume of detailed argument), the main discussion points appeared to be:
* The licensed casino industry would like to see sports betting its exclusive preserve;
* The racing industry would like to be involved in a wider sports betting sector, and feel that the online environment should be included;
* The national sports bodies – particularly the MLB and the NBA – may be amenable to a 1 percent cut from operators a la an Indiana ‘integrity fee’ proposal, even though the justification for such free money appears dubious;
* The national sports bodies appear to be coming round to the realisation that individual states are ahead of federal lawmakers in making things happen;
* National sports bodies would like the right to suggest what types of bets may be acceptable;
* There’s a need for New York to be prepared to move if a positive Supreme Court ruling eventuates;
* The NBA specifically would like to see online betting permitted to serve all New York punters (and discourage them from using unauthorised websites);
* Betting companies are less than enthusiastic about handing a 1 percent integrity fee to national sporting bodies that are already wealthy, and have no real argument to justify such a fee;
* Some betting companies would like to see betting on college sports permitted in order to attract US punters away from unauthorised operators;
* The New York State Gaming Association recommended the state’s slots licensees should be able to offer sports betting, and that servers for online betting should be hosted at licensed land-based betting establishments.
The hearing certainly generated a wealth of expertise and information for New York lawmakers to digest whilst the Supreme Court mulls its decision on PASPA.
More Details On Indiana Sports Betting Bills (Update)
Neither Senate or House bills exclude college sports from provisions
The Indiana Legislature bills filed recently in anticipation of a positive Supreme Court judgement against the Professional and Amateur Sports Protection Act (see previous InfoPowa reports) are clearer following more detail on the content this week.
Indiana is one of at least ten US states that have been preparing legislation enabling early regulatory involvement in what is expected to be a wider and very significant sports betting market should PASPA be overturned, with three states – Connecticut, Mississippi, and Pennsylvania – successfully approving bills so far, albeit contingent on a favourable Supreme Court decision.
The relevant bills in Indiana are H.1325 introduced to the state House by Rep. Alan Morrison, and S.405 in the Senate, authored by Senator John Ford. Interestingly, neither proposal bans betting on college sports, which has the potential to bring them into conflict with the NCAA.
Another interesting twist already reported is in the House proposal, which suggests a quarterly “integrity fee” of 1 percent of wagers made on sports events to go to the governing bodies of the sports (read MLB and the NBA, who are reportedly behind this recommendation).
This fee will be levied on operators, who also would face initial licensing and annual administrative fees and an existing federal excise tax of 0.25 percent on sports betting handle.
The American Gaming Association has opposed the idea, pointing out that “….handing sports leagues 20 percent of what’s left over after winnings are paid out, undercuts its economic viability. Doing so will ensure the illegal market continues to thrive in the state, and gut the tax revenues available to fund essential public services. We believe Indiana taxpayers deserve better.
“We encourage Indiana to reject this short-sighted, misinformed idea, which simply replaces a failed federal prohibition with bad state policy. Our goal is to eliminate the illegal market, protect consumers and strengthen the integrity of the game. We invite all stakeholders to join us in working together in a thoughtful and transparent fashion.”
The integrity fee provision is not included in the state Senate bill, and interestingly has been at the centre of discussions at a New York Senate sports informational hearing recently (see previous InfoPowa report).
More positive content in the Morrison bill includes provision for online and mobile wagering.
There are differences between the two bills on fees, too.
Morrison’s H1325 proposes an initial application fee of $75,000, with a $10,000 online wagering fee and a $5,000 annual licence renewal fee.
Ford’s Senate bill suggests an initial fee of one percent of the operator’s adjusted GGR from gambling activity in the most recently concluded state fiscal year or $500,000 for operators wishing to offer sports betting, whichever amount is larger. There is also a $75,000 application fee, and if operators want to go online a $10,000 licence fee with a $5,000 annual renewal charge.
Where the NFL stands on the bills is not yet clear; it has been one of the main critics and litigants against New Jersey’s attempt to upend the PASPA which has led to the Supreme Court case, and it seems unlikely that it will change its posture.
That said, a favourable Supreme Court decision is likely to trigger an explosion of regulated, licensed and taxed sports betting activity in a number of states, which may lead to change.
Kansas Joins States Preparing For A PASPA Overturn
New House bill proposes sports betting legalisation contingent of Supreme Court ruling
Kansas has become the latest among over 10 US states that have started making legislative arrangements contingent on the US Supreme Court overturning the federal Professional and Amateur Sports Protection Act in the New Jersey appeal case currently before it (see previous InfoPowa reports)
A currently sparse House bill – H2533 – has been introduced via the House Committee on Federal and State Affairs which makes provision for the regulation, licensing and control of single game sports betting by the Kansas State Lottery.
Interestingly, the bill envisages a scenario in which state horse racing tracks would be licensed to offer general sports wagering…despite the fact that there are presently no active racetracks in the state.
The measure appears to include wagering on amateur sporting events, including college sports, which could put it on a collision course with the NCAA.