Research Library

Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming November 2020

While the national scene continues to sort through its trials and tabulations at the presidential level, the 2020 Election saw a great deal of success for gaming at the ballot box. Gaming was featured on the ballot in six states, with five of those having direct implications to sports betting. As will be highlighted later on in this brief, this continues to show that taking measures to the ballot is a method that operators, legislators, and regulators should not shy away from. The key is having the proper education campaign on the positive impacts of sports betting, as well as being prepared to provide answers to the naysayers.

While this applied well to sports betting and to a lesser extent brick and mortar operations, the future for iGaming may not have the same success unless an effective education campaign is run. iGaming brings in a different element to the ballot and legislative conversation, and it is one that will be tested in the coming months as every state legislature meets in 2021. Passage of sports betting measures is often easier when voters can often turn on their television, radio, or social media apps and discuss the line, just as one would discuss how well or how poorly a quarterback is playing in any given football game. iGaming is a more challenging sell, as this is viewed more similarly to a traditional slot machine or a table game directly in the hands of consumers, and legislators need to know that the right measures would in place for financial and consumer protections.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming October 2020

September became the crossroads never seen before in sports. Between the NBA and the NHL that were in their playoffs, the start of a limited college football season, MLB rounding out its abbreviated regular season, the start of the NFL, along with NASCAR, the U.S. Open in both golf and tennis, and the Kentucky Derby, it was quite an opportunity for sports bettors and operators. Numerous states continue to see record setting levels of revenue. Due in part to the unbalanced schedule as well as the continued increase in those states that now have active sports betting, record volumes overall are being wagered legally in the U.S. since the repeal of PASPA (Professional and Amateur Sports Protection Act).

The past month also saw significant agreements and deals between operators, media companies, and teams. The two biggest deals of the month involved NBC Universal and ESPN. In a blockbuster $500 million deal between NBC Universal and PointsBet, the two companies are moving down the field with sports betting that will become part of the viewing experience. Meanwhile, ESPN confirmed its sports betting partner in Caesars Entertainment and William Hill. DraftKings continues on as its fantasy sports partner. The Caesars Entertainment-William Hill partnership brings further light to the recently announced acquisition by Caesars of William Hill that is schedule be completed pending regulatory approval in the second half of 2021.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming September 2020

As the sporting industry continues to reemerge from the Great Shutdown, it now faces its next challenge as it relates to local politics within the United States, including factors such as racial tensions, views of the use of police force, and the upcoming presidential election. Sports has always been viewed as a unifier – one where sports fans can escape the nonsense of the political world to enjoy a game. It appears that in the near term, those days are over.

In the middle of August, the NBA initiated a boycott following the shooting in Kenosha, Wisconsin. The Milwaukee Bucks began what turned into a short silencing of sports. This followed with the rest of the NBA and the WNBA taking a pause before their eventual return to the court after several internal and external discussions between the athletes, teams, and league on whether the season would even continue. The spillover then went into the MLB, NHL, and MLS in response to the initial action by the NBA. While sports betting operators have been banking on the return of sports based on the health and safety measures related to SARS-CoV-2, it was not foreseen that politics would become a deciding factor into another potential shutdown of sports.

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A Sporting Chance

Esports has grabbed the attention of more than just the gaming industry, and for good reason.

The industry’s rapid rise has benefited from numerous omnichannel platforms that allow for unprecedented viewership and engagement from a diverse audience. With the “new abnormal” defined by Covid-19, esports has proven that media consumption is not just about what people can watch on the major networks. Instead, people are turning to streaming platforms like Twitch and YouTube for competitive-based content

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Southern Exposure: Why gaming in the South is one of the last opportunities in the U.S.

The United States hosts a diverse set of gaming options from coast to coast. The gaming-rich Northeast continues to be dominated by strong regional destination casinos such as Encore Boston Harbor, Mohegan Sun, Borgata and Wind Creek Bethlehem. The Midwest remains the focus of the riverboat gaming. Tribal gaming also prevails across the country from North Carolina to Oklahoma and all along the West Coast.

The southern portion of the United States remains largely untouched when it comes to casino gaming. One of the many reasons for this over the years has been the long-held values and deep religious beliefs within these communities that have had an aversion to casino gaming.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming August 2020

Sports have begun to reemerge with more traditional sports with which American consumers are more familiar and have a deeper affinity for wagering. After nearly five months since the start of the Great Shutdown, sports are starting the long and winding road to recovery. Optimism reigns for the fall as we potentially see the return of football as well as the potential addition of the remaining 2020 schedule for the NBA and NHL that just recently restarted. MLB’s abbreviated schedule has faced a bumpy ride out of the gate, not just with Dr. Fauci’s first pitch at the Washington National’s Game, but by the subsequent canceling of games due to coronavirus-related concerns. Nevertheless, while the stands may not be full, sports have returned.

As GMA continues to look at sports betting markets that are limping through the downturn (while also exposing sports bettors to new options), the numbers continue to show that a competitive market leads the way for states versus those that have a limited number of providers or a model driven by land-based gaming. Those states that operate a full mobile wagering product continue to dominate the market and offer the best alternative to the black market. That being said, tax rates also matter and can inhibit a market, as can be seen in states like Pennsylvania. While offering a full mobile experience, the tax rate continues to impose challenges by limiting the operator’s ability to spend marketing dollars, cutting into overall operations, and leaving money on the table for the state that, in a competitive gaming region, would actually see an increase in revenue with a decreased tax rate.

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Research Brief: Creating Dynamic, Competitive Sports Betting Markets

Over two years ago, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (“PASPA”). In overturning PASPA, the Supreme Court has allowed states to begin to regulate sports betting across the country. As of today, there are 19 legal sports betting jurisdictions in the United States, with five others working through regulations and another three states seeking voter approval.

As each of these 19 sports betting markets have been created, there is a direct relationship between the revenues generated and how the how the markets were initially crafted, including factors such as tax rates, the depth of competition, and the ability to offer mobile wagering. This research brief highlights the revenues generated in those states that were among the first movers to the market following the repeal of PASPA. Those states that have shown the highest revenue generation and a competitive tax rate are those that are leading the effort across the United States. New Jersey continues to be the model versus states such as Rhode Island and Delaware that continue to struggle.

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Research Brief: U.S. Senate Judiciary Committee – Protecting the Integrity of College Athletics

Today, the United States Senate Judiciary Committee held a hearing titled “Protecting the Integrity of College Athletics.” The full committee, chaired by Senator Lindsey Graham (R-SC), heard testimony on two major topics in college athletics, Name Image Likeness (“NIL”) and sports betting. These are two issues that, while extraordinarily important in college athletics, the NCAA clearly lacks the proper education to understand their true impacts. The hearing was divided into two panels with a total of seven testimonies on these two major topics:

Panel I: Name Image Likeness
• Dan Radakovich, Athletic Director, Clemson University
• Professor Matt Mitten, Executive Director of the National Sports Law Institute, Marquette University School of Law
• George Wrighster III, Former Member of the National Football League Players Association (“NFLPA”) Board of Representatives
• Dr. Mark Emmert, President of the National Collegiate Athletic Association (“NCAA”)
• Ramogi Huma, Executive Director of the National College Players Association (“NCPA”)

Panel II: Sports Betting
• Bill Miller, President and CEO of the American Gaming Association (“AGA”)
• Heather Lyke, Director of Athletics at the University of Pittsburgh

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Free to Play

As the sports arena fell silent due to the coronavirus, a host of new sports and games sparked the curiosity of sports fans and bettors, such as esports, Belarusian soccer, Russian ping
pong, Taiwanese baseball, darts and more. However, the main professional leagues and other U.S. sports have moved to free-to-play (F2P) as a way to stay engaged with fans during this unprecedented and uncertain time.

F2P is an opportunity for players to engage with games and products for fun or practice, sometimes in real time. F2P offers the same entertaining gameplay offering bonus rewards or prizes found in real-money games while allowing game producers, brands, and operators to cultivate new customers.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming July 2020

As we hit the midpoint of the year as well as over 100 days into the Great Shutdown, sports are still navigating uncharted waters as they look to reemerge. NASCAR, UFC, and boxing have dominated the airwaves in addition to baseball from Asian-based leagues. Sports betting revenues have remained well below average in states across the country including Nevada that, for the second month in a row, redacted the number in its monthly report. Some states continue to see decent numbers as they are able to incorporate online gaming revenue into the mix, while other jurisdictions are using this time to get things in place as they have emerged during the pandemic.

Major professional sports are just starting to figure out how to come back. This includes the soon-to-start NBA that is beginning its social distancing efforts in Orlando. The NHL will be heading north to finish its season, after what was viewed as its favorite hub city in Las Vegas was overlooked because of a spike in coronavirus cases and a media blitz by the local culinary union that did more to dissuade visitation than to protect workers and guests. The biggest question continues to be on the football season that just saw the NFL cut its preseason from four games to two, as well as major college football programs trying to figure out how to start fall camp while testing their student-athletes and staff as they return to campus.

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