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Legalized sports betting unlikely in 3 largest U.S. states

Associated Press
| Saturday, March 2, 2019 5:05 p.m
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AP
This Nov. 20, 2018 shows employees at the newly opened sportsbook at Resorts Casino in Atlantic City N.J. On Thursday, Jan. 31, 2019, Resorts launched an online sportsbook, two days after the Hard Rock casino began offering sports betting as well.

Over the past decade, teams from California, Florida or Texas have competed in more than half the championship series in the four major professional sports — including every NBA final.

That may be no surprise, considering the three states account for 27 percent of all franchises in those leagues. The sheer number of teams and their relative success make them fertile territory for legalizing sports gambling now that the U.S. Supreme Court has allowed every state to offer it.

“These states are the brass rings given the size of the populations and the potential opportunity,” said Sara Slane, a spokeswoman for the American Gaming Association.

So far, that ring remains elusive.

A 50-state review of sports gambling legislation by The Associated Press reveals that legalization efforts are nonexistent or very unlikely to happen anytime soon in the nation’s three most populous states, which together hold more than a quarter of the U.S. population.

The reasons vary. In California and Florida, powerful tribal interests that control most casino gambling are reluctant to reopen their agreements with the state and potentially share the gambling market with other players, including card rooms and race tracks.

In Texas, a combination of political clout from out-of-state casino interests and social conservatives who are morally opposed to gambling have effectively killed any prospects for legalized sports betting.

In all three states, any attempt to allow sports gambling would likely require a statewide vote to amend the constitution — a high hurdle for any issue, much less an expansion of gambling.

“The dynamic at work here is the larger the state, the larger the market, the larger the opportunity — the more complex the stakeholder environment and the more political stasis sets in,” said Chris Grove, managing director of gambling research firm Eilers and Krejcik.

Sports gambling is now legal in eight states, including Nevada, which had a monopoly before the high court ruling last spring.

Arkansas, New York and the District of Columbia also have legalized sports gambling in some form and are working on regulations before bets can be placed, while at least 22 other states are considering bills to legalize it. Advocates think the legislation has a realistic chance of passing in about half those states.

California, which alone accounts for one-eighth of the U.S. population and has 16 teams among the four major professional leagues, will not be joining the sports gambling states anytime soon.

Gambling there is largely controlled by casino-operating tribes that have compacts with the state. The tribes that are part of the California Nations Indian Gaming Association oppose an expansion of gambling even though it could bring more traffic to their casinos, said Steve Stallings, the group’s chairman.

The group is in the midst of a dispute with the state’s card rooms and doesn’t want to see more competition for the tribes by opening a debate over sports betting.

“We feel like protecting the industry in California is more important,” he said.

Just in case it does become legal, the United Auburn Indian Community struck a deal last year with a joint venture of casino company MGM and online gambling company GVC to run the sportsbook at its Thunder Valley Casino Resort, northeast of Sacramento.

Even so, the tribe doesn’t want that to happen, said Howard Dickstein, the lawyer who negotiated the deal on the tribe’s behalf.

“The tribe is not a strong advocate of legalizing sports betting under any circumstance,” he said. “The agreement with MGM is an insurance policy to become allied with a leader if and when it becomes legal in California.”

Dickstein said the tribe would welcome sports betting if it were clear that tribal casinos would control the market in California. But if betting is allowed at card rooms, racetracks or lottery retailers, it would not be so appealing for the casinos. Even if the tribes would receive a big piece of the action, it might mean renegotiating their agreements with the state that determine what is allowed at their casinos — and that could give the state an opportunity to insist on concessions.

A similar dynamic is in play in other states, including Arizona and Minnesota, where bills that would allow tribes to operate sports betting are in danger, partly because many of the tribes oppose them.

In Florida, a major casino-operating tribe also is a key factor.

Last year, voters agreed to make it tougher to expand gambling with a constitutional amendment that requires 60 percent voter approval for any future expansion of gambling in the state. The measure’s supporters included Disney, whose Orlando resort is a major economic force, and the Seminole Tribe, which owns seven of Florida’s eight tribal casinos.

State Senate President Bill Galvano, a Republican, said he believes sports betting could be legalized without voter approval, although he said he might ask for it, anyway. He said broader gambling legislation is being developed that would allow wagering, likely at racetracks, tribal casinos and perhaps in some form at sports venues.

“Sports betting has been taking place here, as it has other places, just not regulated and taxed,” he said.

Any attempt to push through legalization in Florida without voter approval would hit opposition and likely trigger a lawsuit, said John Sowinski, who led the campaign for last year’s constitutional amendment and leads the group No Casinos.

“Any sort of sober analysis of any type of gambling finds it doesn’t add anything to the economy,” he said. “It’s basically parasitic.”

In either case, Galvano said his bill is not likely to be a top priority during the 60-day legislative session that begins on Tuesday. Seminole Tribe spokesman Gary Bitner said in a text message that the tribe would not comment on the status of sports betting in Florida.

Texas, in addition to being home to eight teams in the four major professional sports, has hosted three Super Bowls, three NBA All-Star games and six NCAA men’s Final Four basketball tournaments since 2004.

But the state is far less welcoming when it comes to gambling because of a mix of morality and money: Social conservatives assail it as a regressive tax on the poor, and the official Texas Republican Party platform opposes expanded gambling in any form.

A bill from a Democratic lawmaker seeking to legalize sports gambling has little chance this year in the Republican-dominated Legislature.

The biggest winners if Texas maintains the status quo are casinos in neighboring Oklahoma and Louisiana, whose operators are major contributors to Texas politicians.

Billionaire Tilman Fertitta, owner of the Golden Nugget casinos, has donated more than $500,000 to Texas Gov. Greg Abbott. Two Oklahoma casino empires, the Chickasaw Nation and Choctaw Nation, have given more than $5 million combined to Texas officeholders and candidates since 2006.

Rob Kohler, a lobbyist who opposes gambling as a consultant for the Christian Life Commission, said the consistently winning argument in Texas has been that gambling preys upon the poor.

“Dollars don’t come from the sky,” he said. “They’re coming out of people’s pockets.”

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