The State of Legal Sports Betting in the U.S.: A Year of Stalemate and New Proposals
In a year marked by stagnation in the expansion of legal digital sports betting and iGaming across the United States, states like Michigan and Ohio attempted last-ditch efforts to enact changes. Meanwhile, lawmakers in South Carolina and Texas have begun laying the groundwork for potential betting legislation ahead of the 2025 sessions. All of this comes as various jurisdictions grapple with the complexities of regulating a rapidly evolving gambling landscape.
The Concluding Days in Michigan and Ohio
As the clock approaches midnight on December 31, 2024, any active gambling bills in Michigan and Ohio will effectively expire. Both states have seen significant efforts from lawmakers to introduce new legislation that could expand or modify their current betting frameworks. However, with the 2024 session drawings to a close, a lack of clarity remains as to whether any lawmakers will revisit these proposals in 2025.
Michigan’s Tax Proposals
In Michigan, Senators Sam Singh and Jeremy Moss put forward two crucial bills aimed at increasing taxes on betting and iGaming revenue. Senate Bill 1193 seeks to raise the tax rate on wagering operators from 8.4% to 8.5% for non-tribal betting. This increase intends to redirect additional tax revenue to municipalities, enhancing local funding.
Complementarily, Senate Bill 1194 proposes a 1% tax hike on iGaming, which currently follows a tiered taxation model. Under this proposal, operators would face tax increases across various revenue brackets, aiming to boost state revenue from digital gambling. Unfortunately, neither of these bills will carry over to the 2025 session, leaving Michigan’s future betting landscape uncertain.
Ohio’s Attempts to Legalize Online Gambling
Over in Ohio, state senator Niraj Antani filed Senate Bill 312 in September, which sought to legalize online gambling by permitting each of the 11 state casinos to operate one digital platform. Despite this forward-thinking initiative, it remains inactive; neither Antani’s bill to lower the sports betting tax, nor his online gambling proposal gained traction or hearings before the legislative adjournment. A significant challenge lies ahead as Antani is term-limited, leaving Ohio’s gambling initiatives in limbo.
Forward Momentum in South Carolina and Texas
While Michigan and Ohio appear stalled, South Carolina and Texas are cautiously stepping into the sports betting conversation with new proposals.
South Carolina’s Legislative Entrants
In South Carolina, which has largely refrained from extensive gambling legislation since the overturn of PASPA in 2018, lawmakers have pre-filed two notable bills for the 2025 session.
The first, HJR 3353, is a constitutional amendment that would allow voters to decide on expanding gambling to include in-person parimutuel betting and casino games. Fund allocation from potential gambling revenue is targeted at infrastructure projects, particularly roads and bridges.
The second proposal, HB 3625, is more narrowly focused on legalizing digital sports betting, limiting the number of platforms to eight. This bill not only proposes a 12.5% tax on gross gaming revenue but also aims to introduce a regulatory body for sports betting. Notably, it requires that operators have established a presence in at least five other jurisdictions, posing significant entry barriers for new companies.
Texas: A Comprehensive But Contentious Proposal
Texas legislators face an uphill battle when it comes to expanding gambling options. In the previous session, a bill proposing expanded gambling to include sports betting and destination resort casinos failed to gain traction after passing in the house. High-profile lobby efforts, notably by Miriam Adelson spending over $13 million, reflects the fervor for change, yet significant roadblocks remain.
Democratic senator Carol Alvarado’s recently filed SJR 16 aims to create legal sports betting and establish destination casinos, proposing a tax structure for revenue management. Yet the lack of clarity regarding regulations for digital betting, coupled with the requirement for constitutional amendments, suggests that Texas may not see changes swiftly.
The Road Ahead: Uncertainties and Opportunities
Despite the unfolding dichotomy of stasis in some states and new proposals in others, the future of legal sports betting in the U.S. remains unpredictable. While Michigan and Ohio appear to have hit a wall, the evolving legislative landscape in South Carolina and Texas indicates that interest in sports betting and gambling expansion persists.
The complexities of legal regulations, tax structures, and differing political landscapes will greatly influence the trajectory of these proposals as they move forward. As lawmakers prepare for the 2025 session, all eyes will remain on the developments in these key states, as they potentially set the stage for a new era of legalized betting in the United States.
