Brendan Bussmann

Breaking Down the Adversarial Wall – Building the operator and regulator relationship through education and dialog

As the gaming industry continues to expand as a form of entertainment across the globe, operators and suppliers typically have three questions when they are looking at a brand-new jurisdiction or an expansion in an existing jurisdiction.  Those three questions are: what is the tax rate, what is the license fee, and who is the regulator?

On the flip side, legislators and regulators will seek input from prospective or existing operators as jurisdictions look to craft a new market, expand their market, or bring further innovation.  The balance between these interests can in some cases become awkward as operators look to effectively compete while also balancing the public policy goals of the market and allowing a strictly regulated market.

The crux of this is creating a healthy balance that allows effective regulation in the market, and not to be overly influenced by an operator or an outside stakeholder.  However, regulators must also allow ongoing, healthy dialogue and input into how a market needs to be crafted, how regulations may impede innovation, or how stakeholders can effectively operate in a market that allows the right amount of competition.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – July 2021

The Halftime Report

Over the last 18 months, the world has faced serious challenges.  The paradigm has been turned upside down again and again with the impacts of SARS-CoV-2 and government mandates that have altered the landscape.  These challenges continue as events such as the Olympics will proceed for the first time without fans in the stands, including international visitors that bring significant economic benefit and global attention to the host nation.  This was one of the goals of showcasing the country of Japan to the world, but now the Games will also be without locals.  This has further angered local residents that did not want to host the games during the pandemic as they now will not be able to attend.

The year of 2021 in sports betting will be known for it’s one-upmanship, and this is not because the legislation for sports betting was improving and becoming more refined in using best practices achieved in other states.  It is instead the polar opposite, where the next state tries to one-up the others’ ability to craft a more unique market that often does not bode well for operators and, in the end, the consumers.  Each state that will be highlighted in further detail below has shown unconventional and ineffective path toward crafting their market, including tax rates set at upwards of 50 percent, ambiguity in the law that has caused the regulator to question key elements of their license structure, and in cone case a compact that likely violates the constitutional amendment that was pushed by the same tribe.

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Research Brief: State Legislative Update on U.S. Land-Based Gaming – July 2021

The Mid-Year Point

As the United States hits the midway point of this year, most state legislatures have adjourned their regular sessions. While some legislatures will come back in the fall because of the full-time status, most will only come back for a special session to handle redistricting that continues to to be delayed as states waif for data from the Biden Administration. Below is a summary of the current status in some key states:

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Mergers & Acquisitions – The More Things Change, The More Things Stay The Same

As the gaming industry continues to evolve, so do the industry players, corporations, suppliers, and other stakeholders.  The only constant among this group is that change thrives in this environment.

While some of the players may still look the same since before the pandemic, the hats they appear to wear can vary, as seen with such a high volume of mergers, acquisitions, and other corporate activities over the years.  Even through the pandemic, there was no stopping these continued efforts as companies either were slowed by the initial Great Shutdown or sought new opportunities to move forward.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – June 2021

It has now been more than three years since the repeal of PASPA, with the New Jersey and Delaware markets reaching their three-year anniversary since launching sports betting operations.  It has also been three years of ups and down with the sports calendar and with sports betting revenue.  Revenue for the most part continues to climb, although it is difficult to find a stabilized year of data over the last twelve months due to the pandemic.  While is may be some time as the border wars continue, it will be critical to understand the full growth potential for this expansion opportunity in the gaming industry.

The industry continues to face the challenges of SARS-Cov-2, as seen most recently during the Memorial Tournament on the PGA Tour.  Jon Rahm, who at the time was up by six strokes, had to withdraw from the tournament because of a positive test.  While the PGA let him finish the round and notify him in a bizarre 18th hole revelation, it remind the sports community that this pandemic is far from over, especially on a global scale.  Sportsbooks took the change in the marketing in different ways with some counting it as a withdrawal and returning wagers to players, while other took it as a win for Rahm who had a dominant lead.  This did lead to several conversation throughout the industry on how to deal with these and other incidents in the future, as well as the implications on responsible gaming and potential effects into the future.

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Research Brief: State Legislative Update on U.S. Land-Base Gaming – May 2021

The legislative cycle is coming toward the end of its run for 2021 with only a handful of states remaining that have policy implications other than those states that have full time legislatures. With most focus at this point on Louisiana (the last legislature to go into session this year) and Connecticut on sports betting, a number of land-based opportunities did not materialize into expansion. However, there are options that continue to be discussed across the country that prove that land-based gaming is still very much alive.

Almost every casino is back open in the United States following the Great Shutdown. In several cases, business is currently booming, as seen in the resurgence of the gaming industry that faced its greatest challenge that was imposed by government mandates. Nevada is a prime example of this as it just saw one of the best months it has ever had in generating gaming revenue, surpassing the $1 billion mark. Destinations such as the Las Vegas strip are seeing the return of the leisure customer that is excited to be back after over a year of closures. Part of this has been through the continued health and safety measures of the industry, vaccination efforts that began late in 2020, and the relaxation of draconian polices that were not always rooted in evidence-based research.

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Research Brief: Paving the Regulatory Future for IRs in Japan – May 2021

As the world continues to face numerous challenges and rebounds from the pandemic, most countries around the world remain closed to outsiders. Japan and others throughout Asia are trying to find a way to reopen but have had to implement new restrictions and emergency orders. In Japan, these have been most recently extended until the end of May in numerous parts of the country. This is further complicated by the upcoming Olympics and the inability to host foreigner visitors to the market. Olympic-sized problems surround this event in terms of not just the general logistics of hosting the Games, which were supposed to be a shining moment for this proud country, but also the public sentiment that is growing against hosting the games. A recent online petition had hundreds of thousands of signatures calling for the cancellation of the event, with at least nine of Japan’s 47 prefectural governors concurring with the petition. These issues further cloud Japan’s recovery in general terms and with regard to the hospitality industry, especially on the tourism goals established by the government.

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Opportunity Abounds: Sports Betting in Indian Country will evolve naturally and be profitable for the smartest operators

Since the repeal of PASPA (Professional and Amateur Sports Protection Act) in May 2018 through the Supreme Court decision in Murphy v. NCAA, United States markets have pushed forward to legalize sports betting.

Thirty U.S. jurisdictions have legalized sports betting and more than 22 of those are now operational.  Many of the remaining states provide strong opportunities for tribal communities to take advantage of this expansion.

While opportunity abounds for tribes in sports betting, it’s about getting it right, not speed to market.  One of the main reasons PASPA was overturned was because of states’ rights issues.  Each state will take its own approach to how sports betting may fit into its existing gaming product.

In some cases, sports betting might not be incorporated at all.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – May 2021

Three years into the repeal of PASPA, the sports betting world continues to move forward at a quick pace. The challenges of the last year continue in various facets of the sports calendar that has not quite returned to normal, as well as occasional challenges still with athletes having to go through COVID-19 protocols. As fans will likely return to the stands with the goal of having 100 percent capacity in many cases by the fall, it will bring some normalcy back to the game and eventually, the schedule.

Some 30 states and jurisdictions have now legalized sports betting in some form, with others still having discussions on how to craft an ideal market that suits their needs. What continues not to be normal over some of the recent states is how they are crafting their own markets that are either reinventing the wheel or now reviewing best practices to create the ideal market in terms of competition and revenue potential to the state. At this point, most legislative sessions are closing out their 2021 session heading into June. However, more than a handful of states operate a year-round legislative session. The year 2021 will likely be known as the year that had some more interesting markets crafted which may cause challenges down the way for other states that have yet to legalize.

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Research Brief: PASPA U.S. Sports Betting Three Years Later – May 2021

Three years ago, the Supreme Court of the United States (“SCOTUS”) made a historic decision in Murphy v. NCAA, in favor of states’ rights and overturning the Professional and Amateur Sports Protection Act (“PASPA”). In this decision on PASPA, the Supreme Court has allowed sports betting to now spread across the country with operational sports books in 22 jurisdictions (21 states and the District of Columbia)/ There are eight other jurisdictions (seven states and Puerto Rico) where sports betting is legal, but legislators and regulators are working through the next steps to bring the total number to 30 jurisdictions that have pushed forward since the repeal of PASPA three years ago today.  while some did not expect such a rapid expansion in such a short time, credit is due to Governor Chris Christie for initially pushing this effort on behalf of New Jersey.  It was this initial legal effort that was the catalyst for public opinion to grow in favor of sports betting.  Any assumptions that the overturning of PASPA was done by a public affairs effort, and not by the legal foundations or arguments, discredits the judicial process and the legal framework associated with separation of powers in the United States.

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