Mobile Wagering

The Road to Sports Betting

When the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) last May, casino operators across the United States were euphoric, envisioning crowds of enthusiastic bettors flocking to newly constructed sports betting lounges, holding exciting events during major games, and attracting a younger clientele to
their properties. Several states moved quickly to permit sports betting in some form. While casinos in some states were able to quickly build betting counters and initiate sports betting
activities, most others, particularly in Indian gaming, have come to realize that they must first navigate through a maze of obstacles before taking their first bet.

Sports betting is currently available in some form in eight states: Nevada, Delaware, New Jersey, Mississippi, Rhode Island, Pennsylvania, West Virginia, and New Mexico. Each of these states offers some form of sports wagering, but the products offered and where bets can be made vary by state.

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Research Brief: Education on Sports Betting

Since the repeal of the Professional and Amateur Sports Protection Act (“PASPA”) by the U.S. Supreme Court, seven states have legalized and launched sports betting. These states include Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico, in addition to Nevada which has been operating legally for decades. Each state has tailored their own sports betting regulations to meet their unique market dynamics. While some states have not instituted the most ideal tax rates or structures, these states are adding a new revenue source to their existing gaming and lottery product.

Nearly 30 states have introduced sports betting related language as of the writing of this brief, and others are expected to follow suit in the coming weeks and months as they look either to pass legislation or to study the opportunity that sports betting could provide to their state. Many of these states have already started to hold hearings or are continuing the debate from last year. As these states continue these conversations, they should take two things into consideration. The first is that integrity, first and foremost, is upheld in the legislation and regulations that are established for sports betting. It is never in a fee or royalty that is paid to anyone that is not taking the risk of operating a sports book. Second, there should be no rush to enter the market, as first-to-market status has already been achieved. At this point, it should be about taking the time to get things right by creating a robust, competitive market in a strict regulatory environment.

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Sports Betting Across America: A 2019 Legislative Preview

As 2019 begins, states across the country are looking at their legislative agendas. Every state’s legislature will meet in 2019 and there will be several issues that will be discussed,some of which will revolve around gaming and lottery. One thing that will likely be discussed in every state is the potential for sports betting. This is an important opportunity for state lotteries to expand their portfolio of games and connect with the next generation of players.

Many states are assessing the expansion opportunities for the lottery. This may include the use of video lottery terminals, iLottery, or other forms to sell their existing products through the internet, kiosks, or other means. The potential for sports betting to enhance funding for good causes is another option that many Lottery Directors across the country are hoping their state legislators are considering. Commercial casino and online gaming operators also recognize the economic potential of sports betting, and are lobbying state legislators to implement a license-and-regulate model that would enable them to offer sports betting.

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Research Brief: Reversal of the 2011 Wire Act Memo

Late in the afternoon of January 14, 2019, the U.S. Department of Justice (“DOJ”) issued a new
memo reversing its stance on the Interstate Wire Act of 1961 (“Wire Act”). This 23-page memo
issued by the DOJ’s Office of the Legal Counsel (“OLC”) dated November 2, 2018, stressed that
all forms of gaming apply to the Wire Act. It reversed an earlier DOJ memo issued in 2011 that
stated that the Wire Act only applied to sports betting.

The action, which at best can be described as reversing a reversal, raises several concerns for the
gaming industry, especially for online gaming that occurs in the states of Nevada, New Jersey,
and Delaware, with active startups underway in Pennsylvania. The decision also may have
serious implications for mobile gaming, sports betting, daily fantasy sports (“DFS”), lottery, and
potentially even internet/social media marketing programs. Global Market Advisors (“GMA”)
had predicted for some time that the reversal of the 2011 Memo would occur during the Trump
Administration through the efforts of the Committee to Stop Internet Gaming (“CSIG”).

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10 Trends – Play On

With the recent repeal of the Professional and Amateur Sports Protection Act in the United States, sports betting has become one of the most talked-about topics in the industry. In the coming year, as states and U.S. territories examine how to address PASPA’s repeal, operators will be faced with a significant challenge: creating a suite of products that can effectively compete with the illegal market in a variety of regulatory environments.

To accomplish this task, operators will attempt to do several things, including but not limited to securing access to data, developing in-play/in-game wagering products, and identifying other unique products that can help them enhance fan engagement and viewership, and subsequently help them satisfy all stakeholders.

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Research Brief: SCOTUS Repeal of PASPA

Earlier today, the U.S. Supreme Court issued a ruling on the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case overturning the law and allowing sports betting to move forward in the United States. In a 7-2 decision, the Supreme Court also provided a victory for states’ rights. Today’s ruling allows commercial entities in states and Native American tribes to move forward to conduct sports wagering.

The Murphy v. NCAA case was heard by the Court in December. At the time, Global Market Advisors (GMA) had predicted that the court would rule in favor of states’ rights and sports betting on a 6 – 3 vote supporting New Jersey’s argument. The opinion of the Court issued today was led by Justice Samuel Alito and supported by Chief Justice John Roberts and Justices Stephen Breyer, Neil Gorsuch, Elena Kagan, and Anthony Kennedy. Justice Clarence Thomas wrote a concurring opinion. The dissenting opinion was issued by Justices Ruth Bader Ginsburg and Sonia Sotomayor. Justice Breyer joined the dissenting opinion on a small portion of the overall opinion from the court.

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Research Brief: The Economics of Sports Betting

As the United States awaits a decision by the U.S. Supreme Court on the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) in the Murphy v. NCAA case, stakeholders are busy evaluating the size of the sports betting market opportunity and contemplating how to take advantage of the opportunity. Several government stakeholders have already enacted legislation
regarding the potential for sports betting, including the most recent legislation passed in Pennsylvania (2017) and West Virginia (2018). Many other state governments have introduced
proposed legislation for the new potential market opportunity, including Iowa, Illinois, Michigan, New York, and Connecticut.

These enacted and proposed legislative pieces have begun to shape the potential regulatory framework of a legalized sports betting market in each state, including setting tax rates and
licensing fees. Other stakeholders, including the professional sports leagues, have suggested that an integrity (royalty) fee should be levied as well. Unfortunately, some of these proposed taxes and levies do not fit within the economic construct of the sports betting opportunity as the margins achieved in the industry are too slim for the operator to generate enough profit to justify investment.

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Deep Dive: The Future of Sports Betting in the United States

As the nation awaits the upcoming decision by the Supreme Court of the United States (SCOTUS) in Christie v. NCAA, various stakeholders are evaluating their next steps, and how to maximize the revenue potential from legalized sports betting.

Today, a federal law known as the Professional and Amateur Sports Protection Act (PASPA) limits most legal sports betting to Nevada and three other states. This article examines the critical success factors for sports wagering in the United States and the operators that will be best positioned to provide the products and services that sports wagering customers will seek.

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An Examination of sports betting in America

On December 4, 2017, the Supreme Court of the United States (“SCOTUS”) will hear New Jersey’s case to have the Professional and Amateur Sports Protection Act (“PASPA”) overturned. This review of PASPA, which effectively limits legal sports betting to only the state of Nevada, and to a lesser extent Delaware, Montana, and Oregon, has the potential to be a landmark states’ rights decision. To the gaming and hospitality industry, it has the potential to allow for another source of gaming entertainment and improve profit levels for operators. To government authorities, it has the potential to reduce illegal gaming activities and increase tax revenues.

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Research Brief: Sports Betting & Recent U.S. State Legislative Action

As the calendar reaches the midpoint, many state legislatures are adjourning for the summer or finalizing their budgets prior to the start of the fiscal year. The end of June is also the time when the Supreme Court of the United States’ (SCOTUS) term comes to an end, decisions are rendered, and announcements made for cases to be taken up in the next term that begins in October. GMA provides the following summary of relevant legislative happenings across the United States.

Last week, SCOTUS changed the dialogue within the United States gaming landscape when it announced that it would hear the New Jersey sports betting case (Christie Vs. NCAA) in its next term. Currently, only Nevada, Delaware, Montana, and Oregon allow some form of sports betting. The American Gaming Association (AGA) estimates that the illegal, unregulated sports betting market is a $150 billion-a-year industry. Many estimate that number to be far greater. While most in the industry see this as an opportunity on sports betting, a ruling by SCOTUS in this case has far more to do with states’ rights than wagering on sports.

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