Research Briefs

Research Brief: Education on Sports Betting

Posted on February 15, 2019

Since the repeal of the Professional and Amateur Sports Protection Act (“PASPA”) by the U.S. Supreme Court, seven states have legalized and launched sports betting. These states include Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico, in addition to Nevada which has been operating legally for decades. Each state has tailored their own sports betting regulations to meet their unique market dynamics. While some states have not instituted the most ideal tax rates or structures, these states are adding a new revenue source to their existing gaming and lottery product.

Nearly 30 states have introduced sports betting related language as of the writing of this brief, and others are expected to follow suit in the coming weeks and months as they look either to pass legislation or to study the opportunity that sports betting could provide to their state. Many of these states have already started to hold hearings or are continuing the debate from last year. As these states continue these conversations, they should take two things into consideration. The first is that integrity, first and foremost, is upheld in the legislation and regulations that are established for sports betting. It is never in a fee or royalty that is paid to anyone that is not taking the risk of operating a sports book. Second, there should be no rush to enter the market, as first-to-market status has already been achieved. At this point, it should be about taking the time to get things right by creating a robust, competitive market in a strict regulatory environment.

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Research Brief: Reversal of the 2011 Wire Act Memo

Posted on January 15, 2019

Late in the afternoon of January 14, 2019, the U.S. Department of Justice (“DOJ”) issued a new
memo reversing its stance on the Interstate Wire Act of 1961 (“Wire Act”). This 23-page memo
issued by the DOJ’s Office of the Legal Counsel (“OLC”) dated November 2, 2018, stressed that
all forms of gaming apply to the Wire Act. It reversed an earlier DOJ memo issued in 2011 that
stated that the Wire Act only applied to sports betting.

The action, which at best can be described as reversing a reversal, raises several concerns for the
gaming industry, especially for online gaming that occurs in the states of Nevada, New Jersey,
and Delaware, with active startups underway in Pennsylvania. The decision also may have
serious implications for mobile gaming, sports betting, daily fantasy sports (“DFS”), lottery, and
potentially even internet/social media marketing programs. Global Market Advisors (“GMA”)
had predicted for some time that the reversal of the 2011 Memo would occur during the Trump
Administration through the efforts of the Committee to Stop Internet Gaming (“CSIG”).

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Research Brief: U.S. House Hearing on Sports Betting

Posted on September 27, 2018

Today, The United States House of Representatives Judiciary Committee held a hearing entitled “Post-PASPA: An Examination of Sports Betting in America.” The subcommittee on Crime, Terrorism, Homeland Security, and Investigations, chaired by Representative Jim Sensenbrenner (WI-5), heard testimony from five stakeholders related to sports betting. This included, in the
order presented:

• Jocelyn Moore, Executive Vice President, Communication and Public Affairs with the
National Football League
• John Warren Kindt, Professor with the University of Illinois
• Sara Slane, Senior Vice President of Public Affairs with the American Gaming Association
• Jon Bruning, Former Nebraska Attorney General and Counselor to the Coalition to Stop
Online Gambling
• Becky Harris, Chairwoman of the Nevada Gaming Control Board

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Research Brief: SCOTUS Repeal of PASPA

Posted on May 14, 2018

Earlier today, the U.S. Supreme Court issued a ruling on the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case overturning the law and allowing sports betting to move forward in the United States. In a 7-2 decision, the Supreme Court also provided a victory for states’ rights. Today’s ruling allows commercial entities in states and Native American tribes to move forward to conduct sports wagering.

The Murphy v. NCAA case was heard by the Court in December. At the time, Global Market Advisors (GMA) had predicted that the court would rule in favor of states’ rights and sports betting on a 6 – 3 vote supporting New Jersey’s argument. The opinion of the Court issued today was led by Justice Samuel Alito and supported by Chief Justice John Roberts and Justices Stephen Breyer, Neil Gorsuch, Elena Kagan, and Anthony Kennedy. Justice Clarence Thomas wrote a concurring opinion. The dissenting opinion was issued by Justices Ruth Bader Ginsburg and Sonia Sotomayor. Justice Breyer joined the dissenting opinion on a small portion of the overall opinion from the court.

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Research Brief: The Economics of Sports Betting

Posted on April 2, 2018

As the United States awaits a decision by the U.S. Supreme Court on the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case, stakeholders are busy evaluating the size of the sports betting market opportunity and contemplating how to take advantage of the opportunity. Several government stakeholders have already enacted legislation
regarding the potential for sports betting, including the most recent legislation passed in Pennsylvania (2017) and West Virginia (2018). Many other state governments have introduced
proposed legislation for the new potential market opportunity, including Iowa, Illinois, Michigan, New York, and Connecticut.

These enacted and proposed legislative pieces have begun to shape the potential regulatory framework of a legalized sports betting market in each state, including setting tax rates and
licensing fees. Other stakeholders, including the professional sports leagues, have suggested that an integrity (royalty) fee should be levied as well. Unfortunately, some of these proposed taxes and levies do not fit within the economic construct of the sports betting opportunity as the margins achieved in the industry are too slim for the operator to generate enough profit to justify investment.

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Research Brief: U.S. Supreme Court Sports Betting Update

Posted on December 4, 2017

Today, the Supreme Court of the United States (SCOTUS) heard the Christie v. NCAA case. SCOTUS listened to arguments from former Solicitor General Theodore Olson, representing Governor Christie and the State of New Jersey. The NCAA case was led by former Solicitor General Paul Clement, who defended that the Professional and Amateur Sports Protection Act (PASPA) should remain the law by upholding the Third Circuit Court of Appeals previous decision.

Based on the arguments, Global Market Advisors (GMA) believes that if a vote were held today, SCOTUS would vote 6-3 in favor of New Jersey, thereby repealing PASPA and overruling the lower court decision. The majority opinion would include Chief Justice Roberts and Justices Alito, Breyer, Gorsuch, and Kennedy. Those five, in addition to Justice Thomas, who seldom asks questions within the court, but tends to side with the more conservative judges, appeared skeptical of the argument presented by the NCAA.

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Research Brief: Japan Post-Election IR Bill Update

Posted on October 24, 2017

The Japanese snap election for the lower house has concluded. The Liberal Democrat Party (LDP) and Japanese Prime Minister Shinzo Abe came out on top after a very calculated risk. The LDP
has a majority win in the House of Representatives and, in partnership with the Komeito, now have a two-thirds super majority. This will allow the ruling parties to push their agenda forward,
focusing on several key items including the reallocation of taxes, childcare, preschool education, and the initiation of constitutional revisions. This is in addition to dealing with the labor crunch and the low birthrate that affect Japan’s economy.

In addition and most importantly to the gaming and hospitality industry, it allows for the continued development of Integrated Resorts through the expected passage of the IR Implementation Bill after the passage of the Responsible Gaming Bill in the coming months to a year. IRs will infuse capital projects into the country while serving as a driver to help meet Japan’s
goal of tourism growth.

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Research Brief: Sports Betting & Recent U.S. State Legislative Action

Posted on July 17, 2017

As the calendar reaches the midpoint, many state legislatures are adjourning for the summer or finalizing their budgets prior to the start of the fiscal year. The end of June is also the time when the Supreme Court of the United States’ (SCOTUS) term comes to an end, decisions are rendered, and announcements made for cases to be taken up in the next term that begins in October. GMA provides the following summary of relevant legislative happenings across the United States.

Last week, SCOTUS changed the dialogue within the United States gaming landscape when it announced that it would hear the New Jersey sports betting case (Christie Vs. NCAA) in its next term. Currently, only Nevada, Delaware, Montana, and Oregon allow some form of sports betting. The American Gaming Association (AGA) estimates that the illegal, unregulated sports betting market is a $150 billion-a-year industry. Many estimate that number to be far greater. While most in the industry see this as an opportunity on sports betting, a ruling by SCOTUS in this case has far more to do with states’ rights than wagering on sports.

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Research Brief: The 2016 US Election

Posted on November 7, 2016

The United States’ Election Day is upon us and by this time tomorrow the U.S. will know who has won one of the most divisive races in the nation’s history. As world awaits the results of the election, GMA has provided the following snapshot of some key items the gaming and hospitality industry should watch for as the evening unfolds.

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Research Brief: Gaming in India

Posted on July 16, 2016

Since the release of Global Market Advisor’s (“GMA”) white paper entitled “Gaming-In-India-White-Paper” in April 2016, India’s gaming market has evolved with a new gaming license issued in Goa and the potential legalization of gaming in India’s second largest populated state: Maharashtra. In this research brief, GMA quantifies the value of the potential gaming market in Maharashtra and includes an updated review of the gaming market in Goa.

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