And The Run on Sports Betting (and Other Gambling) Begins

Revenues are brutally insufficient everyplace, and multiple other states are taking a hard look at sports betting (via Stateline.org) to add to their coffers without raising taxes too:

[…]In New Jersey, state Rep. Ray Lesniak (D) is part of a lawsuit seeking to overturn a 1992 federal law that essentially bans sports betting except for the four states that were grandfathered in because they already had wagering programs: Nevada, Delaware, Montana and Oregon.
[…]With Atlantic City casinos in a slump – winnings were down by nearly 20 percent from the previous year – Lesniak wants the state to get a share of the $380 billion that some experts figure illegal betting generates. “Billions of dollars are being bet offshore through the Internet or through organized crime, and those are revenues that could be coming to New Jersey,” he told The Star-Ledger. […]

Several states are thinking even beyond sports betting (from the same article via Stateline.org):

• California voters May 19 will consider allowing the state to borrow $5 billion against future lottery proceeds as part of a deal to balance the budget.

• Illinois has a proposal that would allow lottery tickets to be sold on line.

• Georgia Lottery, under pressure to find new ways to increase revenues to fund the HOPE scholarship program, has pitched casino gambling at Underground Atlanta, a shopping and dining area downtown.

• Iowa introduced two new lottery games to fund veterans’ programs and considered privatizing the lottery.

• Kentucky may have a special session to consider allowing slots at racetracks to boost its famous horseracing industry.

• Maine regulators approved expanding casino gambling hours to include Sunday morning.

• Ohio regulators proposed allowing 14,000 video slot machines at seven horse racetracks and the owner of the Cleveland Cavaliers professional basketball team wants voters to decide whether four casinos should be built in the state.

• Pennsylvania is considering expanding casino gambling to include table games and slot machines in bars.

• Texas, which has a lottery but no other legalized gambling, has an array of proposals, including bids to allow slots at horse tracks, casinos and tribal gaming.

Would anyone be surprised to see an effort to sell off licenses for on-line sites? Interestingly, the traditional commerical casinos’ revenue and tax contribution are decreasing, but that of racinos is increasing. And adding slots to race tracks is also a big trend for revenue generation. Maryland will be bringing on some slot parlors, but they’ve had disappointing proposals as casino managers are proposing fewer machines than the state planned for.

I’ve no objection to betting of any kind, really. But I continue to be pessimistic about making casino and sports betting revenues a structural part of any state’s budget plan. If you do nothing but look at the map in the article from Stateline, what you see is that competition is ramping up and ramping up fast. The pool of money available for betting is not infinite — as both Atlantic City and Las Vegas will tell you as they watch other venues dilute their share on a daily basis.