The Early Line: Is Online Casino Not 'Inevitable'? Yes And No.
Gambling news roundup: Louisiana legislature passes sports betting tax hike; inside oral arguments for Kalshi's case in Maryland; Penn Entertainment, sweepstakes updates.
The Early Line offers a look at the top stories heading into the week, along with some analysis.
Q&A: Online Casino Expansion Not ‘Inevitable,’ Says Cordish VP (Legal Sports Report): “We probably should have been studying internationally, but everybody was pretty much looking here in the US, and caught up in it is online, oh great. Now we see the university studies about the disproportionately impactful effects on low-income demographics and the increases in family disintegration, partner violence, and all kinds of issues. It’s increased welfare and criminal justice costs to the states. At one point, it was viewed as inevitable because they shop online and do everything online. But more and more with the data, it doesn’t have to be inevitable.”
Reading the line: Land-based casinos telling us online gambling is bad because of societal concerns is certainly something. We could have the same argument about casinos existing at all, if we wanted to. Plenty of people still want to have that argument, although casinos aren’t going away due to moral or societal concerns.
I agree, the legalization of online casinos is not inevitable; we’ve only seen a few states legalize it in recent memory. But people will increasingly turn to online gambling, whether it’s legal or not. I can play “skill-based slots” for money right now via the App Store, with zero gambling regulations overseeing it. That’s on top of offshore casinos and the dozens of sweepstakes casinos in the US.
Here’s a press release I recently got about US online casinos; spoiler alert, none of these are legal and regulated in the United States:
So yes, congratulations if there’s no expansion of legal online casinos. While legalization might not be inevitable, online gambling itself is.
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Louisiana Lawmakers Okay Online Sports Betting Tax Increase (Sports Betting Dime): “Louisiana lawmakers approved a bill late Sunday to increase the Pelican State’s online sports betting tax rate. The Louisiana Senate approved Rep. Neil Riser’s (R-20) bill, HB 639, by a 35-3 vote. The legislation calls for an increase to Louisiana’s online sports betting tax rate from its original 15% rate to 21.5% and creates a new fund for D-1 universities. Louisiana is the third state in 2025 to increase its sports betting tax rate.”
Reading the line: In a vacuum, a small tax increase on sports betting isn’t terrible. The outcome that the industry needs to avoid is huge increases that are done with very little thought. Obviously, sportsbooks don’t want to pay more taxes, but this bill at least passed through normal legislative order and isn’t totally out of bounds. The Illinois budget adding a per-wager tax late in the game was neither of these things.
Still, if every state were to increase tax rates, and the blended tax just keeps on going up into eternity, sportsbooks then have a problem. I continue to want policymakers to realize that they are not doing consumers any favors. The harder it is to do business in the regulated sports betting space, the less likely it is we ever get more competition in the industry. And the more you ask regulated sportsbooks to pay, the more likely you push operators and consumers to verticals that are sports-betting-like, where the tax and regulatory burdens are much lower.
Proxy Advisory Firms Split On Third Penn Director Nominee (Legal Sports Report): “Two proxy advisory firms have weighed in with opposing views on Penn Entertainment’s director nominations. On Friday, Institutional Shareholder Services recommended Penn Entertainment shareholders to vote with HG Vora‘s proxy card for three new directors. On Monday, Glass Lewis recommended voting the company’s card that includes just two nominations. Penn’s general meeting is scheduled for June 17.”
Reading the line: Presumably, we get to the end of this drama one way or another next week. Penn is continually pushing back in public on this contentious battle; arguably, it’s best for everyone if the issue is put to bed. Whether that’s done with the directors Penn wants or HG Vora’s additional director remains to be seen. As we head into summer, we continue to see little evidence that ESPN Bet is making any inroads in US sports betting market share.
Anti-Sweeps Bill Advances Through Third New York Assembly Committee (Casino Reports): “New York’s legislative movement to ban online sweepstakes casinos took another small step forward in the Assembly on Friday when Assemblyperson Carrie Woerner’s bill passed unanimously in the Ways and Means Committee. Ways and Means was the third committee A06745 passed by unanimous vote. It originally moved forward from the Racing, Wagering, and Gaming Committee on April 30 by an 11-0 vote; and the Codes Committee approved the bill by a 21-0 count May 28.”
The legislative momentum is on top of the NY attorney general sending cease-and-desist notices to 26 sweepstakes operators. On that front, The Social Gaming Leadership Alliance offered a press release: "While we disagree with the characterization of our members' lawful sweepstakes operations in today's enforcement action, we look forward to working with legislators and regulators to develop a comprehensive regulatory structure that protects consumers while preserving innovation," said SGLA Executive Director Jeff Duncan. "We believe there is an opportunity to create a framework that provides appropriate oversight, mandates robust consumer safeguards, and recognizes the legitimate use of sweepstakes promotions."
Reading the line: I am skeptical that sweepstakes operators are going to successfully lobby for regulation in New York — or anywhere — that codifies sweepstakes as legal in a way that sweepstakes operators will like. The best outcome for the industry is probably creating a firewall against further legislative and AG actions in other states.
More in sweeps news… Play’n GO Faces Scrutiny Over Games on Black Market Sites Despite Anti-Sweeps Stance (Bonus.com): “Play’n GO, a prominent name in the online casino game development industry, is under scrutiny following reports that its popular titles are accessible on unlicensed gambling platforms targeting players in regulated markets such as the Netherlands and Germany. This revelation stands in contrast to the company’s public commitment to operating exclusively within regulated markets. In early May, Play’n GO’s CEO, Johan Törnqvist, made a definitive statement asserting the company’s refusal to supply games to sweepstakes casinos, citing their operation outside regulated frameworks. He emphasized the company’s absolute commitment to regulated markets, a stance that was further reinforced by Shawn Fluharty, Head of Government Affairs, who warned of potential long-term repercussions for entities collaborating with unregulated operators. ‘Anyone doing business with sweepstakes casinos today will find it very difficult to do business in a future regulated market,’ Fluharty said at the time of Törnqvist’s statement.”
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More gambling news
Kalshi’s Maryland Fight: Third Time’s (Not) The Charm? (Event Horizon): “Last week, Kalshi’s lawyers squared off against Maryland’s gaming regulators in Maryland federal court. … It’s safe to say, however, that Judge Abelson’s giving Kalshi the most pushback that we’ve seen so far. I’m not saying Kalshi’s going to lose in Maryland. But Judge Abelson seems to recognize that his ruling here might be the entire ballgame (in Maryland, anyway), and he wants to make sure that his decision doesn’t fall apart…”
Maine lawmakers consider online casino bill during special session (SBC Americas): “Maine lawmakers are reconsidering a measure to authorize online casino gaming. LD 1164 is labeled as unfinished business by Maine’s legislature after the bill was tabled after a unanimous vote in April by the state’s Joint Veterans and Legal Affairs Committee. The bill is being reconsidered during Maine’s first special session, which adjourns June 18.”
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