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As sports betting is now legal in 35 states, the U.S. gaming industry plans to increase its lobbying of state legislatures to legalize internet gaming, a task that has been difficult as politicians have so far dismissed the narrative about significant tax revenues that could be generated.
“I would no longer classify [sports betting] as an emerging product because most states have regulated it,” said Martin Lycka, vice president of American regulatory affairs with BetMGM co-owner Entain.
“Sports betting has taken the market by storm, and I believe compared to the slow burn of igaming is the very strong narrative behind it,” said Lycka during a panel discussion at the National Council of Legislators from Gaming States (NCLGS) summer meeting in Boston on Friday (July 8).
“Internet gaming is [authorized] in seven states and to compare it to the 30-plus states that have regulated sports betting one way or another there is a huge disparity and perhaps I may suggest [the reason] is that the narrative by all of us, but especially the industry, has not made a strong enough case for igaming,” Lycka said.
Lycka said it would be great if Massachusetts legalizes sports betting by the end of the month.
But if the industry is going to get igaming bills approved, “we need to step up to the plate and come up with a stronger, more interesting narrative.”
Currently, New Jersey, Pennsylvania, West Virginia, Delaware, Michigan and Connecticut are the only states that have legalized online casino gaming. Nevada regulates online poker only.
“Fingers crossed,” Lycka said, “we are hoping Indiana will get it across the line in the foreseeable future.”
Indiana is a prime example of lawmakers’ apparent reluctance to legalize internet gaming despite moving rapidly on mobile sports betting.
Republican state Senator Jon Ford led an effort in Indianapolis this year to pass online casino gaming, but Ford ultimately did not even introduce a bill in the Senate and an identical measure in the House failed to receive a committee hearing.
In an interview with VIXIO GamblingCompliance on Sunday at NCLGS in Boston, Ford agreed that online gaming supporters need a new narrative if they are going to get a bill through the state legislature. He confirmed that lawmakers are drafting legislation to be reintroduced next year, trying to improve on the two bills introduced in the House in 2022.
“In Indiana, the narrative for revenue is not working,” Ford said. “It has never worked. I think the [illegal] market argument is the one that is going to help propel us forward. It worked for sports wagering.”
The argument proponents need to make, Ford told VIXIO, is that igaming is “happening now; let’s bring it into a regulated market and control it.”
Ali Bartlett, a lobbyist and partner with Bose McKinney & Evans in Indianapolis, admitted that industry proponents did not have the same struggle to get sports betting through the state legislature as they have faced over the last couple of sessions with online gaming.
The Hoosier State launched legal sports betting in September 2019, making it the 13th U.S. state to go live at the time.
“When we talk about a new form of gaming, especially in the policy-making environment, there are a lot of considerations that they have to undertake,” said Bartlett. “Some of them are political, and some of them are intergovernmental.”
Bartlett and Lycka were joined for the hour-long discussion on the implications and impacts of new gaming options by Scott Gunn, senior vice president of corporate affairs at IGT, and Jasmine Tompkins, legislative liaison and external affairs manager with the Michigan Gaming Control Board.
“Sports betting at the time was an entirely new form of gaming,” Bartlett said. “What we see with igaming is that it’s an outgrowth of what we have already regulated and have happening in our state’s casinos, but somehow it has transformed into a much more difficult policy conversation.”
She said lobbyists have tried to “paint the picture” that online gaming is merely a “new delivery channel for a form of gaming that is already taking place in Indiana.”
“I think largely because of the pandemic, revenue itself cannot be the main driver of this conversation,” Bartlett said. “I’ve heard legislators in Indiana, time and time again, say we can’t do this just because of the initial revenue. We have to have a better policy argument than that.”
“The federal money sent to states eliminates that argument from us while we are having these discussions.”
Bartlett urged the industry to “think outside of the box” as a driver for the conversation on igaming, because even in 2022 some lawmakers will see an expansion of gaming as something that is not palatable.
