Across the Pond and Beyond: US Sports Betting Legalisation in 2022

The Supreme Court ruling to overturn PASPA back in 2018 was a monumental decision within the iGaming landscape that drove forward which of the emerging markets would reign supreme. At the time, many companies were exploring options in various gray and emerging markets with heaps of potential, such as South America and Asia; however, the US already piqued interest with its population nearing 330 million, an appreciation of sports and a culture of betting. That being said, other regions within this vast world haven’t been altogether abandoned, but there has been a notable shift to the consolidation of smaller markets. Nevertheless, it is without a doubt that this decision has caused an impact that we can still feel the ripples of today, four years later, and likely for many more years to come.

Large companies within already established markets, faced with increasing competition and oversaturation, are continuing to be bought and merged into massive international cooperations, ones that can reach both sides of the pond. Established land-based casinos such as Caesars are increasingly moving their efforts to the online sphere to diversify their portfolio and channels of income. These companies have the capital necessary to make such monumental moves, such as acquiring William Hill for £2.9bn ($3.25bn). Another example within recent years is the acquisition of Canadian operator, The Stars Group, for a reported $6.95bn by Flutter Entertainment (one of Europe's heavy hitters at the time – now a global giant – the company formed by the merger of Paddy Power and Betfair). This acquisition comes just a year after Flutter purchased FanDuel, which is one of the two leading sportsbook operators in the US, for a reported $158m. It is worth a lot more today...

This continues to show a move toward diversification of its American assets. To date, we’ve seen over two thirds of US states approve some form of sports betting; however, exceptions and conditions exist, which complicates matters and potential. Now that we have a better grasp of the importance of this market, it’s important to look at what’s happened in the last year (and trust me, a lot can happen in a year when it comes to American legislation) and what looms over the horizon to better prepare ourselves for what’s to come.

Since the beginning of 2022, we’ve seen quite a bit of movement. Arkansas has moved to accepting not just in-person sports betting, but also online sports betting in February. Interestingly, betting in person still proves to be a popular in-between to outright legalisation of sports betting, especially for states that err on the side of caution, easing and reassuring their constituents of upcoming changes. Another major state followed suit in March with Illinois moving fully online and is now among the top five states in both dollars bet and tax revenue. Lastly, Louisiana pushes forward with including online betting and has launched with seven mobile operators including the aforementioned FanDuel, DraftKings, BetMGM and others.

That being said, some states went ahead with both online and in-person betting being fully legal from the get go, such as Kansas, which was competing with Missouri to see which state entered the market first. An important aspect to note is the geographical and historical connotations of neighboring states and their relations. We’ve historically seen that this can cause legalisation to be passed much faster than it normally would, in the fear of missing out on increased tax revenue and potentially tourism to brick-and-mortar casinos. Interestingly, New York, which legalised all forms of gambling in January, is in the forefront of earners within the industry. This comes after it has been estimated that the state lost out on roughly $1.3bn in tax revenue by not legalising quickly enough after New Jersey. We suspect many states will look onto New York as a cautionary tale of, ironically, perhaps being overly cautious and reacting not quite swift enough to the changing legalisations across the country.

Certain states, unfortunately, haven’t had as much luck pushing forward and are currently pending further appeals or expansion into online platforms, such as Florida. While other states like Maryland are going at a snail’s pace to become fully active in the betting space. The Free State has had in-person sports betting since last year, and furthermore voted for online betting back in November of 2020, we still haven’t seen an official launch just yet. In fact, it’s been 19 months since the legislation has passed without it being implemented, making it the longest delay of any state which has legalised. On the other end of the spectrum, Florida has been spun back and forth lately. While Hard Rock secured a spot for its app in December 2021, within a month it was taken down. The Seminole Tribe is currently appealing the court’s decision to vacate the 2021 Florida gambling compact, while FanDuel and DraftKings attempts’ to pass a ballot measure to legalise widespread online betting fall short. With all of this in mind, we wouldn’t hold our breath for Florida to legalize anytime soon, but that’s not to say it won’t bounce back at some point. With a population of just over 22 million, it could prove to be one of the more significant states should it launch.

The last four states which have confirmed and approved sports betting are Maine, Massachusetts, Ohio and Nebraska. Nebraska has opted for in-person betting and is currently still pending. Maine, while legalising sports betting, is unlikely to be online for some time. This highlights an important phenomenon. Namely, while certain states may be rushing into the race, passing legislations, agreeing on tax, taking into consideration Native casinos on tribal land, and so on, all impact the time it takes for a state to actually be live. While the industry might be preparing for an eminent Massachusetts launch, as it plans to launch on January 1, 2023, another state like Ohio will likely still beat it to the punch because of each state dealing with its own complexities.

All that being said, we have a feeling 2023 is going to be giving us even more twists and turns and undoubtedly exciting new state launches and markets to explore. It’s undeniable that the US has become the new frontier for gambling, and we for one, don’t see this slowing down any time soon. In fact, the local considerations and the dynamic nature of the industry makes watching it unfold all the more thrilling.