Five Reasons Your State Doesn’t Have Legal Sports Betting

Legal sports betting is spreading across the US. Still, it remains elusive in many states, including some of the most prized markets.

Since PASPA was repealed, it’s safe to say that underlying conditions are preventing some states from legalizing sports betting. Those reasons aren’t going to up and disappear with the passage of time.  

This column outlines five reasons why some states are unable to pass sports betting legislation.

Reason #1: Existing Laws That Make It Difficult To Expand Gambling

Expanding gambling isn’t always as simple as passing a bill. For example, some states require voter referendums to initiate constitutional amendments.

And then there are states like Mississippi that have existing laws restricting where gambling can take place – which explains why Mississippi only offers on-premise mobile wagering.  

In layman’s terms, wanting to pass a bill often requires more than the already heavy lift of a majority vote in two legislative chambers and a governor willing to sign on the bottom line.

And when you couple these barriers with reasons 2-5 listed below, they’re even more challenging to traverse.

Reason #2: Exclusivity Agreements In Tribal Compacts

Tribal compacts can also throw a wrench in a state’s efforts to legalize sports betting.

Most compacts offer some level of gambling exclusivity, and rarely mention sports betting. That combination leads to complex situations in some tribal gambling states.

Tribes often believe they have exclusive rights to gambling, but not everyone agrees, and these situations place lawmakers between a rock and a hard place.

First, groups of lawmakers will line up behind different factions (reducing the chances the bill can muster enough support to pass). More problematic, passing sports betting laws could result in tribes voiding their compacts with the state or lengthy and costly legal battles. That explains why lawmakers are loath to force the issue.  

Reason #3: Infighting Among Stakeholders

Whether its casinos, race tracks, or the lottery, existing purveyors of gambling have a lot of time and money invested in their current operations and send quite of bit of money to the state and local municipalities. That tends to provide them with an outsized say on how, and even if, gambling expansion occurs.

This hurdle becomes increasingly difficult with each additional stakeholder, and when combined with some of the other items on this list.

Whether its casino vs. lottery, casino vs. casino, tribal vs. commercial, casino vs. race tracks, race tracks vs. lottery, or some other combination of two or more existing stakeholders, everyone involved will want the expansion to happen on their terms. Unfortunately, that often leads to an impasse.

The stakeholder demands (from in-person registration to limiting licenses) will often be labeled protectionist, but that’s a misnomer. If you dig a billion-dollar hole in the ground, employ thousands of residents, or bolster the state’s coffers with millions of dollars in tax revenue every year, you should have a say when it comes to gambling expansion.

Further, even when exclusivity isn’t guaranteed, it’s often implied.

Reason #4: Gambling Is Still A Hot-Button Issue

Despite the expansion of legal sports betting in the US, plenty of people still oppose gambling on moral grounds, and opposition to expanded gambling is often a bipartisan position. Christian Conservatives view it as a sin, and Democrats point to its outsized impact on poor communities.

In addition to outright opposition, many lawmakers simply don’t want to touch gambling with a 10’ pole. It’s an issue that has a small group of vocal supporters, a larger but still small opposition group, and a significant majority of indifferent people.

The reason lawmakers tend to avoid gambling, for this reason, is that upsetting the supporters ends there, but upsetting the anti-gambling crowd can lead to attack ads and campaigns to remove lawmakers from office.

Reason #5: Sports Betting Is Not A Legislative Priority

Since sports betting isn’t an issue most people care about, lawmakers are rarely under pressure to address it. Nor is it a panacea that will fill holes in a state’s budget. Essentially, there’s little upside in passing generic sports betting bills. It’s not going to make a lawmaker’s career, but as noted above, it could break it.

Along the same lines, the trope that budget pressures will have lawmakers scrambling to find revenue wherever they can find it overlooks an important point: that revenue needs to be impactful.

Passing legislation takes time, and legislative time is limited:

• Legislation gets crafted.
• Cosponsors are brought on board.
• Hearings are held.
• Backroom debates and deal-making takes place.
• More hearings are required.
• There are debates on the floor of each legislative chamber.

Only a small percentage of bills become laws, so state lawmakers looking to fill a massive shortfall aren’t going to waste that time on sports betting legislation when there are bigger fish to fry – tax hikes, shifting funds around, cutting essential service budgets.

Frequently, when lawmakers ignore sports betting or push it to the side, it’s a matter of prioritizing their time.