The gambling industry faces a dizzying number of legal and regulatory actions that will dramatically affect its future.
The headlines come daily:
- State after state considers legalizing online wagering, whether sports betting, iCasino or both.
- Regional brick-and-mortar casino operators form the National Association Against iGaming to do as the name implies, work against the proliferation of digital gaming.
- Illinois imposes a per-wager tax on sports bets that will slam operators, especially the largest of them.
- Other states consider more conventional tax increases on digital gaming.
- State after state pushes back on prediction markets, which amount to gambling.
- However, prediction markets may continue to operate legally nationwide and be regulated by the federal government under laws originally intended to allow hedging of agricultural product prices, in essence making events betting a federally permitted and regulated activity.
- State after state wrestles with whether to legalize, outlaw or just tolerate the proliferation of gambling in taverns, restaurants and fraternal halls under guises that range from pull tabs to to skill games.
And if you’re a casino company paying high taxes on your revenues, investing millions and billions of dollars to build your operations and employing tens of thousands of people, quit complaining, the poor tavern owner has his state rep’s ear.
- Charitable gambling, once a cottage business that, as its name suggests, benefitted local charities, is in the early stages of morphing into a big-time casino industry, at least in New Hampshire and elsewhere.
- Pari-mutuel wagering, which long meant betting on horse races, is blossoming into a full-fledged casino industry in states where legislators did not intend to legalize casinos, but no one could have predicted novel interpretations of how computers could turn racing into slot machines any more than a generation ago anyone thought bingo would transform into slot machine gambling.
- Lotteries are going online in more states.
- And if you happen to live in a state where lotteries aren’t legal, no problem, a new type of company, the lottery courier, will buy tickets for you from states where lotteries are legal. Plus, you don’t even have to go down to the nearest convenience store to buy a ticket. It’s all done online, unless you live in Texas, which has decided courier services are illegal.
It all kind of makes the days when states began legalizing gambling on riverboats look quaint.
It’s also a mind-boggling number of unintended consequences such as mechanically aided bingo and computerized libraries of old horse races leading to multibillion-dollar slot casino businesses. Now, it may mean that laws aimed at hedging the price of a bushel of corn lead to national online gaming.
How this new world settles out is uncertain. It could lead to a national approach to gambling, at least online. It could just as easily lead to efforts at limiting, or even prohibiting, online gaming.
What is certain, is that there will be a myriad of investment ramifications.
We’ll look more closely at the dynamics in coming weeks and what they could mean for investors. Meanwhile, I’ll look back nostalgically at the days when gambling simply meant walking up to a cashier window and telling the clerk, “I’ll put five bucks on the number three horse to win.”
