Tax Revenue Shortfalls Could Speed Up Legalized Sports Betting
today at 4:35 pm
It may seem counter-intuitive at first, but the lockdown orders currently in place all across the United States might actually provide a major boost of momentum for the sports betting legalization movement. State by state stay-at-home orders were put into place to slow the spread of the deadly COVID-19 pandemic, allowing only the essential businesses to remain in operation.
It has led, expectably, to a major decline in tax revenue. With unemployment now already at Great Depression levels and very few people buying much of anything beyond the basic needs these days, we’ve seen a severe reduction in both income taxes and sales taxes. New Jersey Gov. Phil Murphy, whose states borders the world’s coronavirus epicenter in New York City, said last month that revenues “have fallen off a table.”
So how can that tax revenue shortfall be made up? Expansion of legalized gaming is a tried and true method throughout American history. With sports betting now legal in Colorado, as of May 1, you can now place a legal sports wager in 18 states. That leaves 32 states to go, and the legislative process may now get sped up due to the coronavirus pandemic and its disastrous effect on state economies.
“We think that this legalization process that is happening at the state level stands to accelerate, and we really think we’ll benefit from that because we operate in more states than any gaming company in the world,” Penn National Gaming CEO Jay Snowden said during an appearance on CNBC this past Thursday.
It’s a divisive issue to be sure, as the vote tally in Colorado conveyed. The legal sports gaming measure passed in November by a ultra-slim 50.7% to 49.3% margin. However, it’s predicted economic impact is expected to be massive. Legalized sports betting has been forecasted to generate as much as $6 billion annually in bets and $40 million in tax revenue for the Rocky Mountain state.
Those figures might seem surprising, and optimistic, given how there are no sports currently active in the United States, but that’s about to change. NASCAR will restart its season this weekend and PGA Tour golf will return in a few weeks. Both sports will conduct business under strict social distancing guidelines.
And we’ve already seen a major shift already from sports books, as they’ve been taking action on all kinds of activities that one might never expect. It’s more than just sports leagues in foreign countries, as bets have been places on: the weather, political races, television shows, eSports and film casting.
Paul M. Banks runs The Sports Bank.net, which is partnered with News Now. Banks, the author of “No, I Can’t Get You Free Tickets: Lessons Learned From a Life in the Sports Media Industry,” regularly contributes to WGN TV, Sports Illustrated, Chicago Now and SB Nation.
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