On Monday, the U.S. Supreme Court gave each state the power to determine whether to allow sports gambling, and it has many people jumping for joy.  Most proponents predict high economic gains from the additional revenue and new jobs.

Here at Liberty Nation, we set out to put some numbers to this speculation – not an easy task. The most thorough analysis we found is a study released by Oxford Economics in 2017: The Economic Impact of Legalized Sports Betting.  We used the most conservative estimates in the study, which assumes legalizing sports betting across all 50 states with a high tax rate (15% of Gross Gaming Revenue) and convenient product offerings (includes casinos, retail locations, and online mobile betting), and the results are as follows:

  • Adding up to $19 billion to the U.S. economy (GDP).
  • Generating up to $36 billion in total economic output.
  • Providing as much as $8 billion in additional annual tax revenue.
  • Adding up to 189,000 American jobs.

ALL 50 STATES BUY IN “NOT LIKELY”

It is important to note these numbers are based the “best case” scenario, assuming all 50 states legalize sports betting.  However, the reality is that although the Professional and Amateur Sports Protection Act was overturned by SCOTUS, each state will have to pass a bill to legalize betting within its borders.

Chris Grove, managing director at Eilers & Krejcik Gaming, a California-based research firm that serves the gaming industry, told USA TODAY it will be at least a year before most states will consider joining the gaming industry:

“Broadly speaking, you’re looking at a few distinct waves in how states will proceed.

The first wave comprises a handful of states that basically have legal mechanisms in place and were just waiting for a favorable ruling from the high court. This includes New Jersey, West Virginia, Delaware, and Mississippi.

The next involves a slightly larger set of states whose legislatures are still in session and have sports-betting bills pending. California, New York, Illinois, and Michigan are among this group.

The largest group of states will wait until 2019 because they are out of session or almost out of session.  How, and when, states move on this will be heavily influenced by the actions of neighboring states.”

Other experts think there will never be an “all-in” when it comes to states offering sports betting and over the next ten years, we would only see about 30 states participate – at most. They could be right. There seem to be just as many opponents to this as there are supporters.

ALREADY PUSHBACK FROM SPORTS ORGANIZATIONS AND MEMBER OF CONGRESS

In Monday’s Supreme Court decision, Justice Alito wrote that there were good policy arguments on both sides about whether to legalize sports betting.

“Supporters argue that legalization will produce revenue for the states and critically weaken illegal sports betting operations, which are often run by organized crime. Opponents contend that legalizing sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.

Congress can regulate the sports gambling directly, but if it elects not to do so each State if free to act on its own.”

Senator Orrin G. Hatch (R-UT), one of the original authors of the law struck down on Monday, said he planned to introduce federal legislation regulating sports betting.  A statement from his office reads, “It will be up to each state to decide whether to legalize and sports gambling and how to regulate it.  However, given that sports betting activity can now be conducted across state lines via the Internet, Senator Hatch believes we need to ensure there are some federal standards in place to ensure that state regulatory frameworks aren’t a race to the bottom.”

The NCAA  wrote on its website, “The NCAA opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community.”  Also, in statements released after the Supreme Court’s ruling, both the NBA and the NFL called on Congress to pass a federal sports betting law.

We may not have heard the last of it on this topic.  It appears to be one of those times when taking a pause seems to be the best route, and it may be wise not to attempt making any predictions. And, of course, no one should yet be counting their chickens.

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Liberty Nation is part of a community of like-minded thinkers.  For reliable news and commentary, our go-to sources are WhatFinger.com and CNSNews.com

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Teresa J. Read, CPA

Business Correspondent at LibertyNation.com

Teresa hails from the great state of Wyoming and spent the last 25 years as a finance executive in the healthcare industry. A family-centric woman of faith, Ms. Read has sat on several non-profit boards and recently relocated from Scottsdale, AZ to The DC Swamp to begin a new chapter in her life.

 

 

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