Even Anti-Gambling States Impacted by Shift in National Attitudes

Gambling expansion is a hot topic in many states at the moment. Some are leading the charge, while others are playing catch-up.

There’s a saying, “a rising tide lifts all boats.” Usually, that’s a metaphor for the economy. However, it also applies to public sentiment about things like gambling. Even states that are miles away from accepting online gambling are affected by the phenomenon and are taking another look at other, more basic gambling options like lotteries and retail sports betting as a result.

The footprint of legal online gambling in the US is constantly expanding. There are now 25 states with legal online sports betting and several that have legalized online casinos. Additionally, other states have retail in-person-only sports betting. More, including Massachusetts, are launching online gambling soon. The success of online gambling is primarily due to the extra tax revenue these states can collect.

Among the best examples is New York, which collected $680 million in tax revenue on its first anniversary of sports betting. The state will put almost all the money into education, with the rest going to gambling education and troubled youth programs.

The enormous potential of extra tax revenue makes a strong case for more states to rethink their stance on online gambling. A recent American Gambling Association report further proves that. It shows that Americans illegally bet over $510 billion at unregulated operators. That translates to about $13.3 billion in lost tax revenue, which can go a long way to fund education, infrastructure, or other significant projects, a welcome bonus in the current economic times.

With this in mind, where do states with no online gambling stand on the road to possible legalization?

Movement In States That Have Rejected Online Gambling In The Past

Those revenue figures show the potential of legal online sportsbooks and casinos. It’s no wonder, then, that more states are making attempts to legalize them.

However, states that were behind the curve to begin with aren’t likely to adopt a full package of online gambling products right away. Retail casinos seem like a necessary precondition for online casinos, for instance. And a state lottery is the most basic form of legal gambling, so states without one are likely to start there.

Texas Considers Sports Betting

The constitution of Texas directly bans gambling in the state. Until recently, few believed that the Lone Star State would be likely to change. Legislators introduced two gambling bills in 2021 but saw them fail.

Still, hope is growing for Texas online gambling proponents. A new bill has appeared in the Texas Senate to amend the constitution and allow sports betting. Another would create a limited number of retail casino resorts in the state. Either, if approved by legislators, would require voter approval in November.

One major difference in this year’s sports betting effort from previous years is the growing support from former politicians and the sports industry.

Texas is home to many sports franchises whose owners are now pushing for change and the legalization of sports betting. Those owners point to the money the state – and they themselves – are missing out on and are looking to change the situation. Dallas Cowboys owner Jerry Jones also points out that sports betting is happening in the state regardless. However, unregulated gambling doesn’t produce tax revenue and is less safe than a legal option.

The proponents even include former governor Rick Perry. Sources say that members of the state government are warming up to the idea. The potential tax revenue is a major selling point. It could go towards education or even border security, the latter being a concern for many residents.

Hawaii Looks to Play Catch-Up

Hawaii is – along with Utah – one of only two states in the country with no gambling whatsoever. However, there’s a growing sense that it’s time to change that.

Hawaii last saw a gambling bill in 2019, and lawmakers are rekindling the effort this year. Rep. John Mizuno and Rep. Daniel Holt, both representing the neighborhood of Kalihi, say illegal gambling is a major issue. They’re looking at legalization as a way to reduce crime. They state that illegal parlors also bring crime, prostitution, and drug dealing. Legalizing gambling parlors will allow regulation and taxation of those funds.

Under the proposal, legal gaming parlors will be established where patrons can play poker and bet on sports. The plan would start with a limited number of test locations to see if it will work. These locations will be small, privately owned, and heavily taxed. Criteria for ownership will be long local residency.

Under the proposal, tax revenue will go towards law enforcement and fighting illegal gambling. Gov. Josh Green is open to the idea but insists he wants to be careful with it.

Even Conservative States Are Warming Up To The Idea

Broadly speaking, most political resistance to gambling comes from conservatives. However, even some deep red states are mulling gambling expansion. As surrounding states have embraced sports betting and other new forms of gambling, many lawmakers in these traditionally-conservative areas are trying not to get left too far behind.

• Alabama: Senator Greg Albritton has seen gambling legislation fail in the past but is determined to try again. His latest proposals included creating tribal casinos, sports betting, and a state lottery. He hasn’t specified what he wants to propose this year, but he will asses which elements have support and plan his bill around that. A study commissioned by Governor Kay Ivey has also provided evidence to support a change in the state’s approach to gambling.
• South Carolina: Multiple failed proposals are not stopping lawmakers. They’ve introduced a new bill to amend the constitution to allow sports betting, Pari-mutuel wagering on horse racing, and casino games, including slots and table games. The proposal will need 2/3 approval from both chambers of the legislature. The Carolina House assigned the bill to the Committee on Judiciary.
• Missouri: A representative from a district outside St. Louis has introduced a sports betting bill. According to him, state residents are already wagering on sports betting, and many cross state lines to place bets. He claims that money can go to the state instead. His proposal includes a 10% tax on sports betting, aligning with nearby states. The bill is awaiting committee action.

More are looking to bring gaming bills, including Oklahoma. Other states are making changes without the need for legislation. One example is North Dakota, which allowed tribal on-reservation online betting through new compacts.

The Winds Of Change

I can’t help but think of the famous rock song of the 90s, but the winds of change have begun to blow. More and more people in the US are starting to warm up to online sports betting and gambling. That was seen as impossible years ago.

A Pew Research Center study found that 19% of adults in the US have placed a bet in the last year. The awareness and population’s views about online gambling are rising.

Over half of the adults say they have read or heard about sports betting. Breaking it further, 69% of male adults have read or heard about sports betting. Of those aware, 46% have placed a wager in the past year, compared to 9% who say they’re unaware but have placed a bet (mostly with friends).

US adults are also changing their views. About 57% see online gambling as neither good nor bad for society, while 34% view it as bad. When we look further, age plays a role. Only 27% of adults 50 and under view online gambling as bad, compared to 41% of those over 50.

The Overton Window

One helpful way of looking at this is what’s called the Overton Window. Politicians use this as a model for understanding how ideas in society change over time and what currently has enough acceptance to stand a chance of becoming law. According to the Overton Window, there are six degrees of acceptance for an idea in society:

• Unthinkable
• Radical
• Acceptable
• Sensible
• Popular
• Policy

For a new idea to become a law, it must move from one end to the other. An excellent example is same-sex marriage. It was viewed as impossible and unthinkable at one point, but the Overton window shifted over time, eventually leading to laws protecting it.

Shifting the Window

The public view of online gambling is shifting nationwide. However, the forms of gambling themselves fall on a spectrum. If it’s acceptable but not yet popular to propose sports betting in a state, chances are that online casinos would be seen as radical or unthinkable. However, a lottery might already be policy, and retail casinos might be a popular suggestion. Once the retail casinos become policy, chances are that other forms of gambling will get bumped up a notch.

Already, a majority of states allow some form of sports betting. The results have been an increase in tax revenue and more funds for education and other critical programs. As the above survey shows, younger generations nationwide are more welcoming to online gambling and don’t see it as bad.

Every state has its own Overton Window, with some very conservative states, such as Utah and Idaho, considering most gambling to be unthinkable. Others, like Texas, are in a transition period, where something that was once unthinkable is gaining more popularity. However, these sit within the context of a national Overton Window. And as it moves, the conversation in individual states will also shift.

Online gambling proponents must raise awareness to see the public’s views change, especially in conservative areas. That will help those trailing states move on the spectrum and warm up to online gambling. At the same time, those states must get on board, as the rising tide is coming, and they risk being left behind.