US Sports Betting Expansion Grinds to Halt

With legislative sessions across the country winding down, 2024 has become the first since 2018 that no state has enacted new sports betting legislation.

In recent years, legal sports betting has spread across the states. No longer restricted to Nevada and Atlantic City, the economic benefits of gambling have spread across the states, and attitudes toward betting have changed, mainly for the better.

Thirty-eight states, plus Washington D.C. and Puerto Rico, have already passed sports betting legislation (retail, tribal, or online) and in 2023, the US market reached more than 163 adults, generating US$11+ billion (£8.6bn) in gaming revenue. Yet, despite the roaring success of sports betting states, it remains illegal in twelve states.

What’s the Hold-Up?

Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Missouri, Oklahoma, South Carolina, Texas and Utah still restrict all sports betting forms. But what’s the hold-up?

Experts had Missouri tipped as this year’s hottest hope of passing new legislation, and that’s because citizens have tried to sidestep the Senate (where gambling bills have repeatedly stalled) and take the matter straight to the ballot. While they managed to collect the required number of signatures to make this possible (380,000, more than double the required amount), these are still being verified; hence, it’s unclear whether sports betting will be on November’s ballot.

Meanwhile, Alabama saw two bills pass the House that would have put sports betting, casinos, lottery, and parimutuel betting up for public vote. However, the Senate committee watered down both, taking sports betting and casino gaming from the table. Discussions are still underway.

Similarly, new gambling bills were introduced in South Carolina and Minnesota but failed to pass the legislative process.

In Georgia, two betting bills passed a senate vote and progressed. However, lawmakers closed the legislative session early without further progressing, killing both bills for this legislative round.

California is a particularly enticing prospect as it’s the second-most populous state in the USA. Nonetheless, things are undoubtedly at a stalemate after lawmakers, commercial, and tribal interests failed to gain public approval in 2022. Tribal opposition to gambling expansion is also preventing further progress.

Oklahoma is another case of split factions, and despite a concerted effort by Governor Kevin Stitt, the state’s tribes have a monopoly on gambling and are holding out. The way forward is unclear.

Texas has a blockage upstream. In 2023, a bill cleared the house but was blocked by Governor Dan Patrick, who has essentially said that the Senate GOP is determined only to bring matters to the ballot that have a chance of passing—and that excludes sports betting. Texas legislative sessions are held once every two years, so sports betting won’t come up again until 2025.

Lastly, Utah has never attempted to legalise sports betting, while Hawaii residents are mainly opposed to regulating gambling.

iGF contacted the American Gaming Association for their comment regarding the current outlook on sports betting legalisation in the USA. Senior Vice President of Government Relations Chris Cylke told us, “Over the last six years since the federal ban on sports betting was overturned, state legislatures across the country have recognized the benefit of having regulated options to bet on sports that deliver tax revenue for their states.

“Although momentum slowed in 2024, it was encouraging to see active efforts continue in several states toward developing regulated markets that promote growth and innovation while providing consumers a safe alternative to the illegal market.”

Meanwhile, Money Flows Offshore

While the twelve remaining states struggle to bypass opposition and navigate towards new legislation, the US illegal offshore gambling industry is still thriving.

According to recent research conducted by Yield Sec, illegal gambling removes approximately US$19.1 billion in gross gambling revenue from the US economy yearly, which is more revenue than is generated in the legal market (US$10.4 billion).

Tackling Illegal Gambling

States that have legalised betting have become more vocal this session about wanting federal-level protections against illegal gambling. The chief gaming regulatory officials of seven states emphasised the persistent issue of illicit competition in an April joint letter addressed to the U.S. Attorney General, urging federal law enforcement to increase efforts in dealing with offshore illegal gambling.

Meanwhile, Michigan and Connecticut became the first states to take regulatory action against an offshore site, sending cease-and-desist orders to Bovada (one of the biggest targeting US consumers offshore). In other areas, various states ramped up their advertising rules and heightened standards to increase responsible advertising measures.

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