Though 2021 was a groundbreaking year for the U.S. sports betting market, several states either failed to pass meaningful legislation or did so with major handicaps. Here are four states that largely disappointed this year:
New York tax, structure upsets market
In 2022, New York will be the most populated state accepting legal sports bets. It will also have the steepest tax rate of any competitive market.
After years of legislative back-and-forth, New York policymakers finally passed statewide mobile sports betting legislation earlier this year, but only did so under an unprecedented tax-heavy structure advocated by then-Gov. Andrew Cuomo. Cuomo has since resigned, but the model remains; 51 percent tax on gross gaming revenue – nearly five times the national median average.
Additionally, sportsbooks will not be able to deduct free bets or promos from their tax burdens, meaning what is already a relatively low-margin industry will be even thinner. That’s on top of the Cuomo-backed sportsbook bidding model that will allow, at least for the foreseeable future, only nine mobile betting options in New York. Meanwhile, Colorado – and neighboring New Jersey – already have roughly two-dozen mobile books apiece and a regulatory framework that allows for even more.
New York’s massive population (and reputation) will spark massive interest in what will likely still be the nation’s most lucrative sports betting market. But stakeholders worry the structure will limit promotions, handicap profits, and ultimately curtail the potential of what was supposed to be one of the most lucrative pieces of the U.S. sports betting map.
Florida sports betting earns the dubious distinction
Florida, the only state with a higher population than New York to technically legalize sports betting in 2021, is also arguably the only state with a messier rollout for its “legal” online sportsbooks.
In November, Florida’s first legal sportsbook launched statewide. The Hard Rock Sportsbook launch came with no advanced warning – and while it was facing multiple legal challenges that sought to stop it from launching in the first place. For a month-and-a-half, Floridians had a legal mobile betting option – even after a court ruled it was illegal – and only lost the ability to bet once an appeals court upheld the initial court’s ruling.
As further court battles loom, Florida sports bettors are left where they started 2021; without legal betting. This fall, the court decision was a brutal blow that makes legal betting via Hard Rock Sportsbook an unlikely proposition any time soon.
Along with a (seemingly unlikely) appellate court victory, Florida policymakers could enact at least retail sports betting through a new gaming compact. DraftKings and FanDuel are also spending tens of millions of dollars on a 2022 ballot measure that, if approved, would allow these companies (and others) to operate mobile books in the Sunshine State. It’s too early to tell if any of these three paths will come to fruition, but in the meantime, Florida sports bettors are left with a memory – and the distinction of living in the only state to start taking “legal” sports bets only to have that option taken away.
Maryland frustrated by the slow online rollout
By Christmas Day 2021, Maryland will have five legal retail sports betting options. By Christmas Day 2022, it may still have zero online choices.
Though Maryland technically legalized online sports betting in April 2021, it may not be until late 2022 – or even 2023 – when its first legal mobile bet is placed. Maryland’s 2021 sports betting law created a second regulatory body, in addition to the state’s gaming commission, to award sports betting licenses. Designed to assure minority, women-owned and small business market participation, this additional bureaucratic hurdle has delayed the retail sportsbook rollout – and leaves online still months away.
Maryland will allow up to 60 online sportsbooks, the most of any state, and up to 47 retail books, including at the state’s three major professional sports venues. Unfortunately for Marylanders looking to place a legal bet from home, state officials have no timeline for an online rollout.
Massachusetts bill falls short – again
Several dozen sports betting legalization bills have been introduced in Massachusetts in recent years, including several from Gov. Charlie Baker. Despite renewed hopes – and some encouraging votes – policymakers have still failed to cross the legislative goal line.
Despite overwhelming bipartisan support for another House sports betting bill earlier this year, the Senate has failed to take a vote on legalizing wagering in the Bay State. Policymakers are still concerned, among other issues, about permitting betting on state universities as well as how online sports betting licenses would be taxed, assigned and regulated. This has been enough to stall legalization hopes for years despite widespread support among lawmakers and the general public.
Massachusetts’ legislative failures are all the more crushing in what remains one of the nation’s most sought-after markets. DraftKings, BetMGM, WynnBet and Barstool Sportsbook are among the top operators with strong financial and intangible ties to the state. Combined with its high education rate and per capita income, as well as major high profile professional sports organizations, Massachusetts will remain a major target for the industry in 2022 despite the shortcomings in 2021.
