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captaingambling Weekly: Legalization of Sports Betting in Michigan draws nearer and other news…

Stephen McAllen

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captaingambling Weekly: Legalization of Sports Betting in Michigan draws nearer and other news…

2019-12-13 | CaptainGambling

With the year gradually coming to an end, there are some exciting and big happenings going on in the sports betting world. Most of these are quite exciting developments which will be sooner or later more noticeable around you. In fact, some of these are included on the frontpage of some top newsprints in the world as well as social media handles. As a result of this, captaingambling gathers these developments and provides these gambling headlines for you every week. These updates are based on “Gambling in the USA.”

Here are the hot headlines trending in the gambling world for this week:

  • Legalization of sports betting in Michigan draws nearer
  • Integrity fees shown by Show-me states
  • California to carry on with sports betting hearings
  • Jack Evans Recommended to get Expelled!
  • Indiana sports betting handle upsurge leads to increased mobile share.

Here are the details in full:

Legalization of Sports betting in Michigan draws nearer

All year long, it appeared that it would be unable for sports betting in Michigan to be legalized but the latest developments seem to state otherwise. Sports bettors can get ready for an exciting ending to 2019 as bills which legalize sports betting as well as online gambling are expected to be passed by the Michigan lawmakers with a bipartisan support. On Tuesday morning, legislation which establishes the framework regarding sports betting as well as internet gaming for persons over 21 successfully cleared the Regulatory Reform Committee in the Senate after the amendments which had been made to the proposal passed by the House at Fall.

Sen. Curtis Hertel Jr. played a major role in achieving this outcome as he brought Gov. Gretchen Whitmer to negotiate on this. He had stated:

People in Michigan are gambling. This just provides a legal avenue for it”.

The governor’s spokesperson, Tiffany Brown also stated through email, that the governor:

is pleased with the progress made on gaming over the course of this year. This is a good, bipartisan solution made possible by working together on a complex issue, and the governor looks forward to closely reviewing this package once it hits her desk.”

Integrity fees shown by show-me States

There are up to 19 states including D.C. in which legal sports betting has been introduced or are being rolled out. Although the sports leagues have advocated for integrity fees, the jurisdictions have refused to grant pro sports the integrity fees which these leagues argue is required to maintain fairness of games. However, from all indications, it seems Missouri is about to become an exception and intends to grant pro leagues these integrity fees.

Integrity fees came up in Missouri regarding two separate sports betting bills, which have both been pre-filed in view of the imminent legislative session of 2020. The language of these implies that the leagues would be given a piece of each bet placed.

According to Senate Bill 567 which was pushed by Sen. Denny Hoskins, State riverboat casinos will be granted the authority to apply for a license to run a sportsbook. Each of these licenses will cost $25,000 with all 14 properties allowed to partner with an online sportsbook for an extra $25,000. The Gross gaming revenue (GGR) will get taxed at 9%, and out of every $100, $0.25 will go to the respective leagues.

Also, Senator Tony Luetkemeyer came up with Senate Bill 754, which would give an opportunity to the riverboats to apply for a sports gambling license. Compared to the bill by Hoskins, Senator Luetkemeyer recommended that the licenses should cost $10,000. The GGR should get taxed at 6.25% and that 0.75% of handle should be paid to the respective leagues.

It has already been shown that the integrity fee will be generally unfavorable to the sports betting industry. Based on a report on the American Gaming Association from Oxford Economics, it was stated:

The League Fee increases the effective tax rate by 16.7% points, assuming a constant hold rate. For example, a state tax of 16% of gaming revenue, plus a 0.25% federal handle tax, is equivalent to an effective tax on gaming revenue of 20.2%. When the Legaue Fee is added, the effective tax rate increases substantially to 36.8%.

California to carry on with hearings on Sports Betting

The Legislators in California are carrying on with their efforts to take up the regulations on sports betting over ballot. Bill Dodd, the Chairman of the Senate Governmental Organization Committee had notified Legal Sports Reports, that together with Assemblyman Adam Gray, they will carry on with hearings of the holdings in order to file ACA 16.

Gaming is overseen by the Senate Governmental Council. The ordinance refers to a constitutional adjustment which will ensure sports betting across California. According to Dodd, he established that the initial hearing of sports betting on ACA 16 had been set to the 15th of January in Sacramento, while multiple hearings are expected to finally approve the bill framework by the legislature in June.

The ACA 16 must be approved for onboarding by at least 2/3rd of the legislative house, a minimum of 180 days prior to the elections scheduled for November. The Chairman agreed that there was an unlikelihood of legislative initiative passing both chambers as well as successfully winning the ballot where there was a lack of support from the state tribes. He stated:

When you get FanDuel, Draftsking, sports leagues and other interest parties merging together, do they have enough money to run an initiative or support one? We’ll have to see.”

Since over half the betting revenues in New Jersey are under mobile betting, Bill Dodd also contemplates its partaking in sports betting as well as its regulation as a compulsory prop for the attainment of success. He stated:

I think if we don’t include mobile, then sports betting will remain in the shadows in the state of California. Part of our goal is to take it out of the shadows, tax it for the benfit of public schools and make sure problem gamblers get the help they need.”

Initially, Dodd had intended to for the ACA 16 hearing to run on the 20th of November at the Staples Centre in Los Angeles. The 18 gaming tribes from India had placed their own initiative of the ballot and adjusted the legislation to permit betting at gaming casinos as well as Indian racetracks a couple of days before the hearing had been initially planned to take place. He stated:

Frankly, I didn’t expect it, but it really wasn’t a surprise. They obviously have firm beliefs on what they see should be happening in this area, and that’s their right. But I represent all the people in the state of California, not just the tribes. And I think our approach to this should be more holistic. This is just about the tribes and not about anyone else. It didn’t deal with online wagering; It didn’t take care of any of the short-term or long-term problems in the gambling industry except ones facing the tribes. I’m not mad about it. I work in Sacramento and special interests are everywhere

He had also confirmed that pre-arranged discuss regarding sports betting with the tribes had not concluded well enough as the tribes made requests on removing the cardrooms. In his own words:

When you look at all gaming interests in California- FanDuel, Draftsking, sports teams, cardrooms… and all these things- so many people were left out of this initiative. We’ve got to consider them as well as the racetracks and tribes…

He stated that removing the cardrooms within the urban areas would limit the revenue from sports betting in the state. Dodd also stated his desire in witnessing all gaming stakeholders including tribes partaking in the hearing. Also, he’s not so enthusiastic on joint hearings being held across locations around the state. According to him, he prefers all hearings to be held in Sacramento and contends on the bill being filled with detailing of the languages as well as the handling specifics of sports betting in California by March.

Jack Evans Recommended to get Expelled!

Jack Evans, a main player in granting a no-bid contract to Intralot to begin operation of sports betting in Washington DC has been shown the way out of D.C. Council.

The Council authorized a report on Tuesday which recommended that Jack Evans be expelled as a result of continual violation of ethics. Evans assisted in pushing through the Intralot contract, which hindered the rest of the lottery suppliers such as Scientific Games and IGT from making bids for the contract. He allegedly acquired private profits wrongly from his public position.

According to a spokeswoman for Phil Mendelson, the Council Chairman, it was stated that he was tentatively preparing to hold a hearing on expulsion on the 7th of January, where Evans will have the chance of a defense, before a formal expulsion vote to be held on the 21st of January.

Expulsion will need the support of 11 of the 13 members of council. Jack Evans was absent when the unanimous votes were taken on Tuesday.

A law firm which the Council had hired in order to investigate the overlap between Jack Evans’s private dealings and public service resolved that he had not disclosed any private consulting clients and had continually made use of his public office to aid businesses from which he got paid amounts in the name of consulting fees ranging into hundreds of  thousands of dollars.

As a result of this investigation, the other members of the council advised that he be removed from office. Based on the report:

Though the committee recognizes the remedy it recommends is extreme, the conduct of Mr. Evans was similarly unprecedented and extraordinary in its scope, character and duration.”

Mary M. Cheh who is also a member of the Council and had overseen the internal investigation had said on Tuesday that the lawmakers “take no joy” in the recommendation of Evans’s expulsion.

On Evan’s part, he disputed the findings from the investigation and his Counsels have appealed for him not to be expelled. As at Tuesday, Evans had failed to make any public comments on the expulsion efforts.

Indiana sports betting handle upsurge leads to increased mobile share

Indiana’s sports betting wrote a whopping $147.3 million in November, which was a 60.6% growth from October based on a report released this week by the Indiana Gaming Commission.

In October, which was the starting month for Indiana’s mobile betting, the sports betting handle was about $91.7 million. Also, as at September, its first month for legal betting, when mobile betting was yet to be launched, there was a record of $35.2 million on its starting month.

As at November, $96.2 million of the sports betting handle arose through mobile, this is recorded as 65.3% of the total handle in the previous month. This was higher than October which had about 52.4%, though still pretty far from the more than 80% share in New Jersey and Pennsylvania. Though those who observe the industry expect the gap in mobile-to-retail in Indiana to increase and attain closeness to both states. Based on Legal Sports Reports’ (LSR) Matthew Waters:

Those states followed a similar trajectory to what is happening in Indiana. Mobile share grew steadily over the first few months of legal sports betting to reach more than four out of every five wagers today.”

Based on the state report, the revenue generated by Indiana sportsbooks in November was $9.3 million, which is about 6.3% of the wagered amount.

It is worthy of mention that the lack of a sports betting presence in the states near Indiana, which are Illinois and Ohio is also a contributing factor to its sports betting business boom, as noted by LSR.

The most wagered on sport was Football, which accounted for wagers of up to $57.7 million. A pair of Casinos which are within a driving distance of Chicago, together booked about $21 million and another, a half-hour drive from downtown Cincinnati booked about $8.8 million in form of retail handle, consequently ranking second in the state.

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