Gambling in the United States is traditionally associated with Nevada, the luxury of Las Vegas, the largest lottery jackpots in the world, the phenomenon of tribal casinos, but sports betting has long remained in the shadows. However, the era of sports betting came more than a year ago. Of course, not all States legalize activities, and even those that legalize business will have unique features of the industry, such is America. However, trends, industry development problems, challenges, and even an approximate set of legislative rules common to all market participants can be identified at this stage. Looking ahead, we note that betting at the legislative level is already allowed in seven States, and ten more are in thought. However, we suggest starting with the background of sports betting in the United States.
Sports betting in the United States: background
That same prohibitive law was passed in 1992 and popularly called the Bradley Law. The fact is that the idea of passing the Federal PASPA law belonged to New Jersey Congressman Bill Bradley, who came to politics from sports. In his youth, the democrat was a professional basketball player. The sports past convinced the politician that betting on sports events should be strictly and without alternative prohibited. His goals were good – to protect athletes from the temptation to organize match-fixing.
In the world, there is a practice of working so-called sports lotteries. In fact, this is a hybrid type of lottery and betting, which is now practiced in China, where all gambling operations are prohibited, except for lottery operations. During the time of the American ban, this type of lottery was popular in Delaware, Oregon, and Montana. A similar system now operates in Ukraine (TOTO lotteries).
It is significant that in may 2018, the US supreme court ruling did not just overturn the Federal ban, but declared it unconstitutional. The underlying problem was that the American system assumed the state's right to self-determination in the broadest sense of the word, and PASPA leveled this right.
Another interesting fact is that despite the ban, sports betting has been legal in Nevada for 26 years.
It should be mentioned that Donald Trump had an influence on the abolition of PASPA, who even before his official election as head of state stated that bets in the United States should be allowed.
The United States is 51 States in one, so the rules regarding betting in them can vary significantly.
First among equals: Mississippi, West Virginia, Pennsylvania, and New Jersey
Several States were so well prepared to lift the ban on sports betting that they legalized it almost immediately after the court's decision. We are talking about Mississippi and West Virginia.
Separately, I would like to explain the phenomenon of Pennsylvania in this issue. In this state, laws that legalize betting were passed under an accelerated procedure, but under such strict conditions that the market here will probably not be able to realize its full potential. The license here costs $10 million, and the tax rate is 36%. Since other States offer a more loyal environment for operators, Pennsylvania's permit is more like a veiled ban.
New Jersey, a state that has been troubled by Nevada's laurels for years, is ready to pit its Atlantic-City against Las-Vegas at any moment. This feature is even more pronounced in the issue of sports betting. New Jersey actively lobbied for the repeal of the ban, was the first to legalize mobile apps for sports betting and, despite the low tax rate of 9%, is the leader in terms of tax revenue from betting operations.
Tribal gambling and betting operations
Michigan is a state where gambling is the prerogative of native American tribes. At the moment, there is no final decision on the legalization of sports betting, only native Americans can organize activities. However, the local legislature is considering legislation that would significantly expand the scope of the sports betting industry. The draft law provides for the legalization of bets not only in land-based PPS, but also remotely, as well as in the format of mobile versions. The tax rate for tribal organizations will be fixed at 8%, and for other operators will be 11.25%. It is planned that each bookmaker will be allowed to launch one site to provide remote services.
State legislators decided to legalize not only sports betting, but also online poker and fantasy sports.
You can accept bids not only offline, but also through special websites and mobile apps. The cost of the betting license will be $1 million, the annual fee will be $50 thousand. the Tax rate will be set in the range from 10 to 14%.
According to preliminary estimates, the state budget will receive at least $20 million from the legalization of the above operations. Thus, local authorities plan to eliminate the lack of funding for important social projects.
Rhode Island-on the front line
Rhode island has its own peculiarity: bookmaking is practiced here on the basis of gambling establishments.
Rhode-Island legalized sports betting in the first rows, and residents of the state were able to place bets on sports six months after the cancellation of PASPA. Later, additional rules were adopted that allow you to launch the mobile app and place bets remotely.
Sports betting: enemies and problems
The main concern of opponents of the idea of legalizing sports betting operations is the risk of spreading match-fixing and a boom in gambling addiction. Therefore, both the first and the second are trying to minimize, providing for mandatory deductions in favor of sports teams and for the treatment of ludomania.
In addition, most States impose restrictions on the placement of ground-based GPS near social, medical, educational, and spiritual institutions.
Mobile gambling apps are no longer a breakthrough, they are a time requirement for the gambling industry, but not all States are ready to allow them. It is believed that mobile and remote betting can contribute to the spread of gambling addiction.
Another important element of legislative regulation is the definition of the player identification process. The latter is necessary in order to protect minors from participating in sports betting operations. For example, users in many States first need to visit a land-based sports betting point to confirm their identity, and only then will they be allowed to place bets via the Internet or mobile apps.
The sports betting industry in the United States is developing rapidly, demonstrating not only impressive financial results, but also that legalization, based on the popularity of the industry, was one of the public needs. At the same time, each state in its own way delimits the limits of what is allowed, fights challenges and calculates profits. Meanwhile, the wind of change continues to fill the sails of the us sports betting industry.
Recall that the full legalization of sports betting in the United States, according to analysts, could replenish the state budget by $400 billion annually.