How should one characterize the year that’s soon coming to an end?
On the one hand, 2022 has represented a world getting back to normal after the pandemic years of 2020 and 2021. On the other, it hasn’t really been all that normal. There’s a global economic crisis to contend with, and a war raging in Ukraine that some feared would snowball into a larger conflict.
As far as plunging stock prices go, some of that may just be the result of investors having been overenthusiastic about the recovery in 2021. We’ll be feeling the aftereffects of Covid for some time yet.
It’s the same story within the gambling world. Hopes were high for US online gambling coming into 2022. Although it hasn’t been a bad year, exactly, there hasn’t been as much progress as we might have expected.
Most online gambling stocks are down; some by considerably more than the market average. No new states have launched online casinos. Since Michigan passed its gaming expansion bill at the end of 2019, no other similarly large states have come close – only the small duopoly market of Connecticut.
Perhaps that’s what we should call 2022: The Year of Tempered Expectations.
That’s not to say there wasn’t a lot going on. However, a lot of what did happen in 2022 was the groundwork for things to come. Let’s take a look at some of the year’s top stories and what insight we can glean from them.
No. 1 – New York Launches Online Sportsbooks, Eyes iGaming
As it stands, regulated online casinos have made it into two of the top 10 states by population: Michigan and Pennsylvania, with New Jersey sitting just below at No. 11.
However, the industry is still waiting for its first state with 20 million residents or more. There are four of these “Holy Grail” states, of which New York is by far the most promising. Texas and Florida are just too conservative when it comes to gambling, while California’s political labyrinth has thwarted all those who’ve attempted to navigate it.
New York has a positive example of online casinos in next-door New Jersey, and a strong proponent of iGaming in Sen. Joseph Addabbo. Most importantly, it launched online sports betting in January and has been seeing the money roll in ever since.
There will definitely be an attempt to legalize online casinos in New York next year. If it were to succeed, it would be the first state to do so in the year immediately following a sports betting launch. There may be a sense that such a one-two punch would be too much, too fast. However, the amount of money the state is leaving on the table by not having online casinos could be enough to overcome that hesitancy.
No. 2 – Gambling Expansion North of the Border
It may be true that no new states launched online casinos in 2022. However, there was some progress in the Great White North.
Ontario, Canada’s largest province, launched semi-privatized online gambling in April 2022. Canadian federal law only allows for provincial lotteries to conduct gambling activities. However, Ontario Premier Doug Ford’s government felt that private sector operators could enter the market through partnerships with a new agency, iGaming Ontario (iGO).
Already, Ontario online casinos are facing their first legal challenge. The Mohawk Council of Kahnawake believes that iGO is not doing enough to qualify as “conducting and managing” the private sector activity as required by federal law.
How that battle plays out is sure to influence what other provinces do in the future. So, too, is the question of whether Ontario’s new gambling sites are making as much revenue as expected. In the meantime, lottery-operated online casino gaming and sports betting have come to almost every province, and Saskatchewan launched the country’s first online gambling partnership between a provincial government and First Nations.
No. 3 – No More Wire Act Worries for iGaming
One thing that has been holding online gambling back in the US has been the worry of interference by the federal government. Although legalizing online casinos is a state-level decision, some federal laws present potential hurdles regarding how companies conduct their business.
One of these is the Wire Act, which forbids the use of telephones, the internet, or similar technologies to place bets across state lines. Its original function was to help enforce the federal prohibition on sports betting. However, the Department of Justice attempted to reinterpret its wording to apply to other forms of gambling as well.
The DOJ failed to defend its interpretation in court, but also refused to reverse it formally. Fortunately, International Game Technologies (IGT) came to the rescue, filing a pre-emptive lawsuit to hammer the final nail into the Wire Act’s coffin.
IGT’s success this September will be of particular importance to US online poker sites, as it means that the DOJ will not be able to interfere with multi-state traffic sharing.
No. 4 – Michigan Prepares for Multi-State Poker
That brings us to our next story. Even before Michigan’s online gambling market launched in January 2021, state lawmakers had passed a bill to allow the Michigan Gaming Control Board (MGCB) to enter into multi-state agreements for purposes of poker.
Actually implementing that has proven to be a long process, even by regulatory norms. It took over a year before the MGCB announced that it was ready to enter the Multistate Internet Gaming Agreement (MSIGA). This compact was pioneered by Nevada and Delaware and later joined by New Jersey.
Notably, of the major US poker operators, only WSOP operates in Nevada and Delaware. So the addition of Michigan means it will be the first time that the likes of PokerStars and BetMGM Poker can become multi-state networks.
Speculation that this would begin over the summer or in the fall has proven to be too optimistic. However, an announcement by PokerStars on Dec 9 has foreshadowed that the first New Jersey-Michigan network will go live on Jan. 1. Its NJ and Michigan sites shut down for server upgrades to make this possible on Dec 12-13, but the company’s promise to launch shared liquidity in “the coming weeks” left it ambiguous whether to expect it at the end of 2022 or in early 2023. Today, PokerStars announced it would happen on Jan. 1.
Another bit of good news is that the Wire Act was the main thing holding Pennsylvania back. Thanks to IGT’s victory, the four-state compact is likely to grow to encompass five sooner or later. However, based on Michigan’s experience, that might still be years away.
No. 5 – WSOP Settles Into Its New Home
The pandemic disrupted all facets of in-person gambling in 2020. But perhaps the most dramatic and visible impact was on live poker. Virtually all events from March onward ended up being canceled, including the annual World Series of Poker.
It was the only year since the WSOP’s inception in 1979 that an in-person series did not take place. Even in 2021, it was a smaller-than-usual affair that took place in the fall, rather than its usual summer time slot.
Like many things, the WSOP got back to a “different sort of normal” in 2022. The biggest change in its case was the venue. Caesars – which owns the series – had sold the Rio in 2019, so the move had been coming for several years. The new venue, which spans Bally’s Las Vegas (soon to become the Horseshoe) and Paris casinos, will be the WSOP’s home for the foreseeable future.
The series proved to be successful in its new home, though it wouldn’t be a WSOP without some weird stories cropping up. Many, including us here at Bonus, expected the Main Event to set an attendance record. In the end, it came up just shy, and 2006 remains the biggest year on record. However, the odds are pretty good that 2023 will be the year the record falls, as the series seems more popular than ever.
No. 6 – Two Billion-Dollar Lottery Jackpots in a Single Year
Online gambling revenue and poker tournament attendance aren’t the only things to have climbed. Interstate draw lotteries had quite a year as well. Mega Millions and Powerball each saw a player win a jackpot of over $1 billion, just a few months apart.
Coming into 2022, there had only been three such jackpots in the history of US lotteries. Never before have there been two in a single year.
The $1.34 billion Mega Millions jackpot of July 29 wasn’t the biggest ever produced by that lottery. That honor still goes to an October 2018 draw which awarded $1.54 billion. However, it was the third-biggest US lottery jackpot at the time.
Powerball finished what Mega Millions had started, setting the all-time US and world record in November. It was the first time any lottery has ever awarded a prize of over $2 billion. On the way there, it also sent ticket sales and internet searches through the roof.
Although Powerball and Mega Millions have been around for nearly three decades, the first billion-dollar jackpot came in 2016. The next two were in 2018 and 2021. It seems like this may be the new normal, then, and we may well see another ten-figure prize awarded in 2023.
No. 7 – The End of PredictIt?
One sad aspect of 2022, from a gambling perspective, has been the loss of some legal options for Americans.
For the most part, this has been smaller sportsbooks shutting down, unable to find their place in a highly competitive market.
Most bettors won’t be too upset about losing Vie.gg, TwinSpires, MaximBet and Fubo Sportsbook. After all, plenty of other options exist.
It’ll be much harder to find a replacement for PredictIt, however. This political predictions market is by far the more significant of only two legal options for staking money on the outcome of elections in the US.
Barring a legal miracle, however, its days will come to an end in February 2023. That’s the deadline the site was given by the Commodities and Futures Trading Commission (CFTC) when it withdrew the No-Action Letter that had allowed PredictIt to operate without enforcement action by the CFTC.
Proponents of PredictIt and similar products say they provide more than just entertainment value, offering insight into the way the public thinks about elections, while also allowing companies and individuals to hedge against political risks. The CFTC seems unconvinced, however, having denied its approval to a similar site, Kalshi, shortly after withdrawing its blessing from PredictIt.
Overall, US gambling seems likely to continue expanding in 2023 and beyond. However, it seems like political betting is a bridge too far, at least for now.
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