In a pivotal moment for online gambling legislation, stakeholders and legislators are now poised to embrace a comprehensive framework that will shape the future of internet gambling across the United States from 2025 onwards. This initiative was detailed at the recent National Council of Legislators from Gaming States (NCLGS) conference in Pittsburgh.

Drafting the New Framework

Former Florida State Senator Steve Geller played a central role at the NCLGS conference, detailing anticipated components of upcoming legal iGaming legislation and moderating a robust discussion with a diverse panel of regulators and industry stakeholders.

This group vigorously debated the priorities and strategies essential for the successful implementation of the legislation. According to Geller, the proposal suggests a tax rate of 15%-25%, which aligns with the current average of 19% observed across the seven states where online gambling is legal.

The proposed legislation is ambitious, covering a range of critical areas including:

• Revenue generation
• Responsible gaming
• Addressing the cannibalization debate
• Establishing advertising standards
• Licensing frameworks
• Setting age restrictions
• Enhancing data sharing mechanisms

Timeline for Legislation

Shawn Fluharty, NCLGS president and a West Virginia state representative, announced plans to circulate a draft of this legislation among NCLGS members by August 1st. This will kickstart a 30-day public commentary period. Subsequent revisions will be informed by this feedback, with a final draft expected to be presented at the NCLGS winter meeting in New Orleans from December 12-15.

States Embracing Online Gambling

While nearly 40 states have legalized some form of sports betting following the 2018 Supreme Court decision, only a handful, including West Virginia, Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and Rhode Island, currently allow comprehensive online gambling. The distinctions between sports betting and casino gaming are significant, as noted by Lee Copella, iGaming compliance director at the Pennsylvania Gaming Control Board. Copella emphasized the more stable and predictable revenue stream from casino gaming compared to the fluctuating nature of sports betting.

Maryland’s Legislative Journey

In Maryland, State Senator Ronald Watson has been a prominent advocate for legalizing online gambling, underscoring the necessity of treating the legislative process akin to a campaign. He highlighted the importance of extensive educational efforts aimed at both legislators and the public. Maryland’s approach involves putting gaming expansion decisions directly to voters, with the next opportunity slated for 2026.

Economic Considerations and Technology Implications

The financial implications of online gambling are significant, with tax revenues from digital gaming outpacing those from sports betting by a substantial margin. This revenue potential is crucial, especially as states begin to feel the economic pinch from depleted COVID relief funds. The importance of technological standards and anti-money laundering measures was also a key focus of the discussions, with David Rebuck, former head of the New Jersey Division of Gaming Enforcement, advocating for high regulatory standards to ensure a secure and reliable gaming environment.

Overcoming the Cannibalization Myth

The debate over the potential cannibalization of physical casinos by online platforms continues, but as Bill Pascrell III of the Princeton Group argued, this concern has been largely debunked by data from states like New Jersey, which shows minimal impact on traditional casino revenues and employment.

Source:

US legislators crafting model legislation to create pathway to legal igaming, igamingbusiness.com, July 22, 2024.

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