As football season is in full swing, another favorite American pastime is all the buzz, not just around the water cooler or in bars and casinos, but among lawmakers as well. Sports betting is already happening in America, and in many cases, it’s done offshore, unregulated and in the shadows. It’s time sports betting is made legal and regulated.
This was the topic of conversation among lawmakers and industry stakeholders on Capitol Hill yesterday during a congressional subcommittee hearing on sports betting.
The congressional hearing was the first one held since a major Supreme Court announcement. This past May, the Supreme Court overturned the Professional and Amateur Sports Protection Act, which did away with a federal law and cleared the way for states to make their own laws.
Until that ruling, Nevada was the sole state that offered sports betting. Since May, Delaware, New Jersey, Mississippi and West Virginia have acted to legalize sports betting. Several other states are planning hearings and taking up legislation this fall session on sports betting, including, Illinois, Kentucky and Massachusetts and others.
There are many reasons states are moving quickly to legalize sports betting. There is an economic boon that awaits them. Projections from GamblingCompliance cite a sports wagering market with potential worth between $3.1 billion and $5.2 billion by 2023.
New Jersey is a great economic case study. Sports betting was first offered there this past June, and in just three months by August, the state received $16.5 million in revenue from bets placed in state. August was truly a banner month for New Jersey. In that month alone, New Jersey received $9.2 million in revenue from more than $95 million in sports betting wagers placed in the state, and online betting accounted for more than one-third of the state’s total sports betting revenue. Also last month, to accommodate sports fans, the first mobile sports betting app was launched.
This is the just the beginning for New Jersey. As more state businesses enter the market, sports betting revenue will continue to rise.
There is a history of results in the Garden State with legal online gaming. In research commissioned by the trade association I founded, iDEA Growth, data from three years of regulated online gaming in New Jersey found that the industry contributed $998 million to the state’s economy, created 3,374 new jobs and generated $124 million in tax revenue, including $83.5 million in online gambling taxes. Not offering online gaming in addition to sports betting would clearly be a lost revenue opportunity for states.
GOP Rep. Tom MacArthur of New Jersey along with Democratic Rep. Dina Titus of Nevada jointly penned a letter to the leaders of the House subcommittee that held yesterday’s hearing because they are apprehensive of the federal government’s getting involved in the types of gaming happening in their states. The letter stated, “As members from states that have already legalized, regulated, and opened the doors to sports betting, we have seen success of regulation at the state level and feel proposals for a federal framework should be approached with caution.”
Because of the new energy focused on the issue, we are taking our message to state capitols throughout the country. We recently crafted model legislation for states to replicate the outcomes and successes of those currently offering sports betting and online gaming. States must consider the enormous opportunity for increased revenue, job creation and an overall boost to their local economy. They should also incorporate a mobile provision in the laws to bring sports betting to their phones.
Mobile is the way of the future for the sports betting industry. We do everything with our phones, and online entertainment should be no different. Nevada is leading the way with more than 60 percent of sports book bets placed through a mobile gaming app. Online and mobile provisions are a logical opportunity for states to gain additional revenue as well as offer convenience for players to engage in their favorite forms of entertainment from anywhere.
While convenience is a smart business model, mobile more importantly offers regulators the means to monitor and track the type of bets and people placing them through an online portal, and to ensure that only those of a certain age with verifiable IDs and financial resources can play. This creates a safe and proper environment for Americans to participate in their favorite pastime.
As the gaming industry continues to expand in the United States and around the world, the industry has become more innovative, and that is good for American businesses. From the expansion of mobile apps to the investment in new technologies, such as virtual reality casino games, there are a lot of exciting advancements ahead for the industry. And due to increasing consumer demand, the broadcast networks are responding with expanded offerings on sports-betting related programs, including on Fox Sports 1, ESPN and CBS Sports.
Sports wagering is already happening. Bringing it out of the shadows and modernizing the industry have been long overdue. Let’s do it right by making it legal, regulated and mobile.
Jeff Ifrah is founder of iDEA Growth, a nonprofit association seeking to grow jobs and expand the online interactive entertainment business in the United States.
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