3/5 Of States Would Legalize Sports Betting

3/5 Of States Would Legalize Sports Betting

A new market research report shows that 3/5 of the states would move to legalize sports betting if the federal prohibition on the practice should be struck down or repealed.

Eilers & Krejcik Gaming, the gambling industry research firm that conducted the study, found that 32 states in all would likely move toward passing legislation that legalizes and regulates sports betting in some form by 2023. It’s all contingent upon the elimination of the Professional and Amateur Sports Protection Act of 1992 (PASPA), which bans all states but Nevada, Delaware, Montana and Oregon from offering legal sports betting to its residents. New Jersey, one of the states that attempted to pass regulatory legislation just prior to the passage of PASPA but didn’t get the deed done in time, is leading the charge to bring down the law, taking on the mantle of the defender of equal sovereignty doctrine in the process.

Politicians in New Jersey, a regional gambling hub, including Governor Chris Christie, have taken their efforts all the way to the Supreme Court, arguing that PASPA’s ban on sports betting treats different states differently in a clear violation of states’ right and popular sovereignty – in other words PASPA is unconstitutional. It looks like New Jersey will get a decision from the highest court in the land by 2018 at least, and then, if the Eilers & Krejcik report is to be believed, it’ll be time for these dissident states looking to legalize sports betting to put up or shut up.

Driving the desire for a legal, regulated market for wagering on sporting events is the potential for a gargantuan tax base worth an estimated $6.03 billion annually, according to the Eilers & Krejcik report. However, that number substantially undercuts the $150 billion the American Gaming Association estimates Americans wager on sports every year. That’s because the report doesn’t touch on the degree to which these 32 states would allow legal sports betting in their home markets.

The Eilers & Krejcik report further estimates that “black market sportsbooks,” in this case meaning sports betting sites that are legal, licensed and regulated in countries outside the US and operate outside federal legal jurisdiction, bring in a handle of $50 billion to $60 billion annually. If the 32 states that would aim to legalize sports betting in all its forms, including online, could theoretically look to rake in $2.5 billion to $3 billion in tax revenues. It remains to be seen if the states, freed of the bonds placed on them by PASPA’s prohibitions, would merely stick to brick-and-mortar sportsbooks or if they’d venture into a regulated online sports betting market in attempt to cut into the dominion of offshore sportsbooks.

The 2023 date the Eilers & Krejcik study operates under is worth another look, as considers the potentiality of nationwide legalization for sports betting occurring much sooner. The public will to do it is certainly there, as a newly released Washington Post poll shows 55 percent of Americans support broader legality for sports betting at USA online sportsbooks, which is a total reversal from 25 years ago when 56 percent opposed the practice. However, the Supreme Court could always drag its feet in reaching a decision, not take up the PASPA discussion to the satisfaction of interests on either side of the argument, so time will tell if the Eilers & Krejcik report can “cover the spread.”