Legal Sports Betting Roadblocks in the Three Most Populous States
When the Supreme Court opened the door for states to legalize gambling on sports if they so choose, it came as no surprise as to who was one of the first. New Jersey was the driving force behind the push to give the states the power to decide. So, it only made sense that they were in a position to get something passed as quickly as they did.
Delaware was actually first to do so by a few days (June 5, 2018; New Jersey followed on June 14).
Since then, several other states have followed (i.e., Mississippi, New Mexico, West Virginia, Pennsylvania, Rhode Island, etc.). Most states seem to be interested in the idea and are said to be discussing it or considering a bill. But being interested and talking about it is one thing.
Passing legislation is something else altogether.
As surprising as it may seem, some of the states that you may think would be in favor of legalized sports gambling are not even close to passing legislation. There are three states in particular that stand out as having the most to gain while simultaneously failing to make any significant progress:
Pro Sports In California, Texas, and Florida
Over 25 percent of the population of the country lives in California, Texas, and Florida. The three states combined account for 27 percent of the total number of franchises for all four major professional sports (NFL, NBA, MLB, and NHL).
While they are not necessarily the best teams in their respective leagues as a collective, they are well represented when it comes to playing for a championship. Over the last decade (2010-19), they have been among the best in their sport:
- NHL: four conference champions; two Stanley Cup champions
- NFL: two conference champions
- MLB: eight league championship series winners; four World Series winners
- NBA: nine conference winners; nine championship winners
Quality play breeds interest among fans and gamblers. With so many teams playing at a championship level over the last decade from those states, it stands to reason that there would be a lot of interest in sports betting. No one likes to bet more than someone who doesn’t think his or her team will lose.
Factor in the level of fanaticism some fans have for their sport, such as football fans in Texas, and it seems even more likely that there would be significant interest in legalized sports gambling.
But, that doesn’t seem to be the case.
Progress in the Three Key States?
There really hasn’t been any significant progress made in either California, Texas, or Florida to date. A ballot initiative was proposed in California, but failed to gain any steam whatsoever and died without a single signature.
A member of the Texas legislature proposed a bill in Texas recently, but the Republican-controlled state had no interest in even considering a gaming bill introduced by a Democrat. The Republican party line on gambling expansion in Texas is pretty cut and dry:
“We oppose the expansion of legalized gambling.”
But like the failed ballot initiative in California, some view the proposed bill in Texas as a step in the right direction; a conversation starter:
“I think the introduction of a bill like this starts the conversation, and while it may not end up on the ballot this year,” Daniel Wallach, an attorney and gaming expert, (said). “I think going forward, the prospects are promising for Texas because it’s probably one of the most important markets for sports betting, probably a top 5 market.”
It doesn’t look any more promising in Florida, either, where the most recent action involved the passage of Amendment 3, which will require the expansion of casino gambling (which includes betting on sports) to be put to a vote. While the state is in talks with the Seminole tribe, a legal question has already been raised whether the state can allow the tribe to begin taking sports wagers without approval by the voters first.
Roadblocks
The Supreme Court took care of the most significant roadblock states were facing leaving only whatever barriers existed in each state for proponents to deal with. In the states that have passed legislation, the roadblocks were not as significant as they are in others– like Texas, California, and Florida.
Chris Grove, managing director of gambling research firm Eilers and Krejcik, summed up the issue well in a comment printed in the Chicago Tribune:
“The dynamic at work here is the larger the state, the larger the market, the larger the opportunity — the more complex the stakeholder environment and the more political stasis sets in.”
California (39.5 million), Texas (28.7 million), and Florida (21.3 million) are one, two, and three in the country in population by state. So, it is safe to say they qualify as large states. Each definitely has what can be called a “complex stakeholder environment.”
In California and Florida, several parties are interested in legislation that would legalize gambling. But the major roadblock in both states is one that will not be easy to overcome: The Indian tribes in each state currently control gambling.
While they would embrace the additional revenue stream, they don’t want to share with any of the other interested parties. They are afraid that if they support legislation and reopen their existing agreements to negotiation, they may be forced to share more than just betting on sports.
Rather than risk losing a piece of what they already have, they decide to stick with the status quo.
However, in Texas, it is a little different. Indian tribes are not the issue in Texas. Conservatives with a lot of political clout, out-of-state casino interests, and social conservatives are keeping any hopes of legislation from moving.
Now, the state does allow bingo, lottery, and betting on horses, but has held fast to not expanding gambling any further. Many of the conservative Republicans running the state have called it a regressive tax on the poor and object to it on a moral basis.
“Dollars don’t come from the sky,” Rob Kohler, a lobbyist and consultant for the Christian Life Commission, said (via Chicago Tribune). “They’re coming out of people’s pockets.”
It doesn’t help that casino-related individuals have been donating money to the campaigns of the conservatives in Texas that are objecting to sports betting.
Tilman Fertitta, the owner of the Houston Rockets and the Golden Nugget casinos, has donated a half a million dollars to Texas’s Republican governor, Greg Abbott (who has made it clear that he does not favor legalized sports betting).
The Chickasaw Nation and Choctaw Nation, two tribes that operate casinos in Oklahoma, have donated over $5 million to various Texas politicians since 2006.
New Mexico is the only neighboring state that permits betting on sports. But the fear is that if the state approves one form of gambling, they will be more likely to approve others. That means the tourist business—and money – that comes from Texas could dry up.
Will It Ever Happen?
You can never say never. Interests can change, enemies can become friends, and people can start viewing the potential revenue as having more worth than any moral objections. But only time will tell. So, for now, the illegal sports betting and offshore industries will continue to thrive in the nation’s three most populous states.
Tania brings over 10 years of experience as a gambling industry reporter to BettingUSA.com, providing frequent news coverage and coverage of current events.
