Opinion: Five Questions Facing US Sports Betting In 2023

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US sports betting

Last year in US sports betting had its share of surprises.

The last year was capped by some big defeats at the polls for sports betting expansion, but there was also Massachusetts finally crossing the goalline after years of it being “the year” that the Bay State was going to legalize sports betting. At the end of 2022, 36 states had legalized sports betting, though Florida was left in limbo, and who knows what is happening in Nebraska.

Nonetheless, 2022 saw continued expansion. What will be the big stories coming out of US sports betting in 2023? Obviously, time will hold the answer, but I have a few areas that I have my eye on for where there might be some breaking news at some point over the next 1`1 months.

What will happen in Florida?

Perhaps one of the biggest questions out there is what will happen with sports betting in Florida. After the federal District Court in D.C. put an end to regulated sports betting in the state, it seemed unlikely it would return anytime soon.

However, on appeal, the D.C. Court of Appeals appeared to breathe at least a glimmer of life in Florida sports betting’s lungs, when at least one of the three judges seemed interested in the appellants’ case, perhaps signaling that there was a possibility that the District Court decision could be overturned.

A decision for the appellants on the fate of the 2021 Compact signed between Governor Ron DeSantis and the Seminole Tribe of Florida could effectively flip the lights back on to mobile betting in the state. The Court of Appeals decision seems likely to set off a further appeal to either an en banc panel at the D.C. Circuit Court of Appeals or a petition for certiorari at the Supreme Court.

While both appeals are permissive as opposed to mandatory, this case does present some interesting and unresolved questions that might pique either’s interest.

Tribal gaming’s sports betting future

While the Sunshine State is waiting on the courts to decide if sports betting will return this year, 2022 proved a valuable lesson for outside commercial interests seeking to enter states with entrenched tribal gaming stakeholders.

This year will likely be when tribal gaming receives more attention. As the number of states where commercial expansion is a straight shot through the legislature dwindle, tribal gaming states will continue to come into focus.

States like Oklahoma and Minnesota, where tribal gaming has a strong track, record are likely to gain more attention. To the extent that compacts need to be renegotiated, the path to expansion may be slower than in states where legislatures are able to pass bills without prolonged negotiation.

Will anyone cross the line this year?

With only slightly more than a quarter of the states left without legal sports betting, one of the biggest questions, at least for the people living in those states, is whether anyone can legalize this year. We have already seen announcements and bills filed in some states, but the road this year gets increasingly steep.

Oklahoma, Minnesota, Hawaii, and Texas all have been mentioned as possible places that sports betting could be legalized in 2023. It is not clear that any of these states has the political will to move a bill all the way through, which could set up a big year for ballot initiatives in 2024.

If you thought you had seen spending in 2022 with sports betting initiatives, get ready for 2024, a presidential election year. It is likely that spending will continue to increase as the sports betting market begins to mature and companies continue to seek a path to profitability.

Who might follow Ohio’s lead?

One of the biggest stories to come out of late 2022 has been the vigor with which Ohio regulators have issued fines to companies that violate the state’s regulations. Many have observed the fines and questioned why more states are not issuing more meaningful discipline.

Advertising is in the crosshairs of many regulators on just about every level of government, like the outrage or annoyance with daily fantasy sports advertising back in August and September 2015. Not all publicity is good publicity for the industry. The ubiquity of sports betting ads, in addition to documented issues surrounding advertising violations, is causing politicians to question what can be done to rein in these ads.

While a blanket ban on all advertising probably would not pass constitutional muster, there are almost certainly less extreme regulations that governments could impose should they so desire, while getting the necessary political capital.

US sports betting consolidation?

One of the things that have emerged in the now nearly five years of regulated betting outside Nevada is that profitability is proving elusive. There is still a great deal of advertising spending going on, but little movement in which companies are at the top.

Some companies already packed up and left; the question is what is going to happen in the coming year. While some startups appear to be gaining traction, mergers and acquisitions in the industry will be something to watch moving forward, especially with big names like Fanatics coming into the space.

Ultimately, what happens this year is a mystery, but as we will enter year five of legal sports betting in much of the country, we are starting to see the market mature. Many operators are still looking for profitability and many politicians are looking for ways to head off constituent complaints about advertising being everywhere.

All in all, 2023 is shaping up to be another consequential year in the world of US sports betting.