Trustly Regulatory Services: Four Years Post-PASPA - Where Are We Now?

May 14, 2022, marked the four-year anniversary of the U.S. Supreme Court’s decision to overturn the federal Professional and Amateur Sports Protection Act (PASPA), which prohibited states outside Nevada from legalizing and regulating sports betting.

The decision has completely transformed the gaming landscape in the U.S., with reports that over $125 billion have been wagered by Americans. To date, there are 32 states, including the District of Columbia and Puerto Rico, with some form of legal sports betting in operation.

Meanwhile, there are four states that are legal, but not yet operational:

• Ohio is in the rulemaking process and is expected to begin accepting applications on June 15 by the OH Casino Control Commission. The Buckeye State will have a universal start date, which if all goes well, could potentially be by mid-October.
• Nebraska, which legalized sports betting in 2021, is working on how to turn its racetracks into racinos where sports betting will be permitted.
• Maine and Kansas are the newest members of the post-PASPA club, having enacted legislation on May 2 and May 12, respectively.

The Missouri and Minnesota legislatures each adjourned another session without being able to garner support for sports betting. The industry will now turn to watching the few remaining states. North Carolina, which has a bill pending from last year that would expand wagering to online, has a few weeks to get the bill over the final stretch. Plenty of action, as always, has occurred in Massachusetts, where each chamber has passed its own version of sports betting legislation. This means the Bay State will need to convene a conference committee to hash out any differences in the bills if there is any hope to pass a bill.

Although the 2022 legislative session has had a slower rollout and enactment rate, two other key events will be happening this fall.

First, on November 8, Californians will get to vote on competing ballot initiatives that will determine the outcome of sports betting in the state. The first measure is backed by the state’s gaming tribes and would authorize land-based wagering at tribal casinos and racetracks. The second initiative, which has not officially qualified at the time of writing but is on track to, would permit statewide mobile wagering via partnerships with tribal casinos. The second initiative is backed by operators that include FanDuel, DraftKings, and BetMGM.

To date, ballot initiatives for sports betting have proven effective at legalizing the activity in several states, but no state has had competing, let alone multiple, initiatives. In the end, voters will determine what sports betting will look like in the Golden State.

Also likely to occur this fall, are oral arguments in Florida’s Seminole Tribe sports betting case. The Seminole Tribe appealed a D.C. District Court decision from November 2021 that vacated the Seminole Tribe’s gaming compact, which, among other items, granted the tribe exclusivity over land-based and mobile wagering. The district court found that the Indian Gaming Regulatory Act (IGRA) only permits gaming on tribal lands, thereby rejecting the “hub and spoke” system that states wagers are considered placed where the server is located. 

Several tribal gaming specialists have voiced their opinions that the ruling will be reversed. If the decision stands, however, a ballot initiative will likely be required to legalize sports betting in the Sunshine State, which would have to wait for 2024. The wider impact on how to interpret IGRA and online gaming leads to a critical decision in tribal gaming throughout the U.S.

Stay tuned to the Trustly blog for more regulatory updates!