Legal Sports Betting In The US Would Not Instantly Mean Legal Online Sports Betting

Posted on July 10, 2017
Written By on July 10, 2017

[toc]The New Jersey sports betting case heading to the US Supreme Court has let the imaginations of many run wild.

Namely, the prospect of the state winning its appeal to allow sports betting also offers the possibility that a number of other states could quickly move to legalize sports wagering. (Some already are well on their way, including Mississippi and Connecticut.)

And while that may be the case, online and mobile sports betting is not likely to proliferate nearly as quickly as land-based wagering.

The lay of the land for mobile sports betting

Here’s where we’re at in the United States in terms of online betting: Not very far.

A trio of states — New Jersey, Nevada and Delaware — have legal online poker or gambling. That’s it. (Pennsylvania appears poised to join them.) A handful of states have legal online lotteries.

Nevada — the only state where you can place single-game sports bets — also has mobile sports betting. And that has proven to be a success, as sports betting handle has increased substantially since its advent.

But in a world where states can change their laws to allow sports betting, there is not likely to be a corresponding groundswell of support for online sports gambling. To think states will instantly legalize sports betting and also allow it to happen online ignores the lack of support for online gambling around the country thus far.

Why online gambling’s progress has been slow

States have gotten more and more comfortable with gambling in recent decades. Whereas Las Vegas and Atlantic City were once the only real bastions of legal gambling, casinos now dot the landscape around the US.

But apart from the growing acceptance of gaming, online gambling of any type in the US brings with it its own baggage:

Education efforts have lagged

Policy makers continually trot out debunked problems with iGaming, including access for minors, geolocation of users and cannibalization of land-based casino revenue. (None of these have been proven to be legitimate concerns.)

Few seem to realize it’s happening already

This goes along with the education idea above. But it’s terribly easy to gamble at unregulated offshore casinos and poker rooms in any state. The “ban” on online gaming in 47 states is a prohibition in name only, and not in practice. Trying to stop gambling on the internet is a fool’s errand. Offering a regulated alternative that allows states to capture that revenue makes far more sense.

Getting stakeholders on the same page when it comes to iGaming is difficult

Look at California, which has been talking about legalizing online poker for a decade, with no results. Figuring out the logistics of an online gaming (or sports betting) rollout is different in every state, and usually has to appease all of the existing gaming interests in the state. That’s no easy task.

Casinos don’t have a consistent message

If casinos told states unanimously that they wanted online gambling, we’d undoubtedly have more laws on the books than we do now. The American Gaming Association is officially neutral on online gambling. And casinos and tribes in states take various tacks when it comes to iGaming, sometimes outright opposing it.

The final point is the key one. If casinos, tracks or other potential licensees don’t advocate for online sports betting in addition to brick-and-mortar wagering, there’s going to be relatively little momentum for it to happen quickly.

The argument that sports betting may go online quicker

Despite the headwinds that have so far slowed online gambling, sports betting has a slightly different starting point:

  • Daily fantasy sports has set the stage: A dozen states have legalized DFS — which many argue is a form of sports betting — as a game of skill in recent years. And they have done it with fairly minimal regulation. More will come this year. That momentum is something that iGaming has failed to generate.
  • Sports betting is more accepted: Despite the de facto national ban on sports betting, it’s engrained in the fabric of the country. People who don’t bet on anything else all year round will fill out brackets for the NCAA tournament or plunk a few bucks down on a Super Bowl squares contest. ESPN commonly talks about betting lines in its broadcasts. Hundreds of billions of dollars are bet annually at offshore sportsbooks.
  • More states are in the mix for online gambling: Despite the lack of progress, more and more states have started to think about iGaming. Beyond PA, that includes New York, Illinois, Michigan and Massachusetts. Sports betting could benefit from that momentum, or actually nudge some of the states forward.

All of that makes it more likely that sports betting could move online quicker than we might suspect.

Still, states are probably not going to instantly flip the switch on online sports betting. That probably includes New Jersey, as well, despite the success of its online gambling market.

No matter what, everyone should be prepared for the reality that a world with legal sports betting in the US does not mean you’ll be able to do it online in a short timeframe, should New Jersey win.

Dustin Gouker Avatar
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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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