H2GC Reports The US and Sports Betting | Page 12

Regulatory Change – Courts or Congress?
Context
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The context for our ‘deep dive’ into the US sports betting market was driven by:
ü The SCOTUS (Supreme Court of the United States) decision to hear the New Jersey (NJ) appeal case vs PASPA – scheduled for 4
December 2017, with a decision expected sometime during Q2 of 2018;
ü The growing momentum behind the American Sports Betting Coalition (ASBC) established by the AGA – and the AGA’s quoted
$150bn handle illegal sports betting market figure;
ü A Washington Post survey in September 2017 showing that public opinion in favour of sports betting regulation has shifted from
41% in favour (at the time of PASPA regulation – source: Gallup/CNN/USA Today, 1993 ) to 55% (today – source: The Washington Post, 2017 );
ü The recent passing by Pennsylvania of a bill to offer legalized sports betting, albeit at a tax rate of 36% GGR initially proposed;
ü The paradigm shift seen generally within betting over the last 10 years – from land-based to online; from horse racing to sports;
from PC/desktop use to mobile; from pre-match betting to live in-play; with increasingly physical and digital channels
converging.
The interesting aspect surrounding the pursuit of PASPA in the Courts by New Jersey in 2017, is that 25 years ago when President
George H.W. Bush signed PASPA into law six days prior to the 1992 Presidential Election (itself symbolic), a ‘one-year window’ was
provided for States operating casino gaming, to also pass sports betting legislation. While aimed principally at NJ, the State failed to
exercise this option in time. Arguably it has been trying to play catch-up with Nevada ever since.
It is significant that an estimated 72% of SCOTUS appeal cases result in some sort of law change (source: Sports Betting USA Conference, New
York, 2017). Likely outcomes of the NJ case are:
1. The ‘status quo’ is preserved – no change;
2. PASPA is declared “unconstitutional”;
3. An ‘appropriate’ level of review is required to take place with a period of further consultation begun within the industry through
Congress.
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