Virus spread could aid sports betting
States look for ways to recover lost revenue
ATLANTIC CITY — Huge holes in state budgets due to the coronavirus pandemic and the demonstrated eagerness of fans to bet on sports are likely to spur a further expansion of sports betting and online casino gambling, experts said Tuesday.
Speaking at the Betting On Sports America online conference, gambling executives, analysts and lawmakers agreed that the lure of new tax revenue could prove irresistible to cash-strapped state governments facing large deficits due to the pandemic.
And the results of last month’s elections, in which voters in numerous states approved allowing or expanding casinos or sports betting, show that demand exists for legalized gambling in additional states. According to the American Gaming Association, the casino industry’s national trade group, 44 states plus Washington, D.C., have legalized some form of casino gaming, including sports betting.
Chris Grove, head of sports and emerging verticals for Eilers & Krejcik Gaming, said his research firm expects about two dozen states to consider some form of sports betting legislation in 2021, with “a viable path to passage” in half of them. He cautioned that adding other forms of gambling to sports betting bills can reduce their prospects of approval.
“Most states are going to need revenue,” said Andrew Winchell,
director of government relations for Fanduel. “Online casinos and sports wagering are new opportunities for this. It’s not just a new source of revenue, but also a hedge against brick-and-mortar (casinos) having to close for a period. States like New Jersey that had online casinos were able to get tax revenue and keep operating online.”
Like most states, New Jersey shuttered its casinos for more than four months earlier this year as the pandemic spread across the U.S. Most physical casinos around the country are operating under restrictions limiting the number of people allowed inside.
“Legislators are going to be looking under every couch cushion to find new revenue,” said Chris
Cylke, a senior vice president with the American Gaming Association. “They’ll be looking at expanding brick-and-mortar (casinos), and igaming will be an easier discussion to have in state legislatures.”
By the end of 2021, at least 25 states and the District of Columbia could have legal sports betting in place.
But states should temper their enthusiasm about sports betting revenue as a budgetary windfall. An Associated Press analysis of sports betting revenue and U.S. state budgets in 2019 found that numerous states missed their revenue projections.
The AP found previously that taxes on sports betting would generate just a fraction of 1 percent of most states’ budgets if they met their estimates.