INSIGHT US LEGISLATION BETCOMPLY
are concerned that introducing iGaming could draw customers away from traditional land-based casinos, ultimately harming their revenue streams. Tis fear of cannibalisation leads to reticence in pushing through online casino bills as policymakers weigh the potential negative impact on existing casino establishments.
3. Prioritisation of revenue streams: Some lawmakers prioritise sports wagering over iGaming because they perceive that sports betting has a higher revenue potential. Te booming popularity of sports betting and its potential to generate significant tax revenues may overshadow the perceived financial benefits of iGaming, leading to a lack of urgency in its legalisation. Tese factors collectively contribute to legislators'
The discrepancy in tax rates between sports betting and iGaming has several impacts on states that have legalised both forms of gambling. While ideally, industry stakeholders would prefer uniform tax rates for sports wagering and iGaming, the higher tax burden on iGaming has several implications.
cautious approach to introducing online casino bills despite the size of the market and its potential for growth. Balancing the economic opportunities of iGaming with concerns regarding responsible gambling and the impact on traditional casinos remains a complex challenge for regulators and industry stakeholders alike.
Sports betting has carried a lower tax rate on average, between 10 to 15 per cent, while taxes on iGaming have been in the 15 to 35 per cent range. What impact is this having on states which have legalised both sports betting and iGaming?
Te discrepancy in tax rates between sports betting and iGaming has several impacts on states that have legalised both forms of gambling. While ideally, industry stakeholders would prefer uniform tax rates for sports wagering and iGaming, the higher tax burden on iGaming has several implications.
Firstly, the higher tax rates on iGaming may deter potential operators from entering the market or investing further in their iGaming
P48 WIRE / PULSE / INSIGHT / REPORTS
offerings. Te increased tax burden reduces the profitability of iGaming operations, potentially stifling competition and limiting market growth.
Additionally, the higher taxes on iGaming could lead to disparities in revenue distribution among states that have legalised both sports betting and iGaming. States with lower tax rates on iGaming may attract more operators and generate higher tax revenues than states with higher tax rates.
However, despite the higher tax rates, iGaming operators may still find the business viable due to the minimal expenses required to operate online platforms compared to traditional brick-and-mortar establishments. Te impact of increased taxes on iGaming operations may, therefore, be mitigated to some extent by the relatively lower operational costs associated with online gambling.
Overall, the disparity in tax rates between sports betting and iGaming presents challenges for states in optimising revenue generation while ensuring a competitive and sustainable gambling market. Achieving a balance between tax rates that incentivise industry growth and generate sufficient revenue for state coffers remains a key consideration for policymakers in jurisdictions where both forms of gambling are legalised.
What states do you anticipate will legislate sports betting and iGaming respectively in the coming months and years?
In the US, several states are actively considering legislation to introduce both sports wagering and iGaming. For sports wagering, states such as Alabama, California, Georgia, Minnesota, Missouri, Oklahoma, Texas, and Hawaii are currently in the legislative pipeline. However, the specific timelines for approval in these states remain uncertain.
Similarly, states like New York, Hawaii, Indiana, and California are exploring potential legislation for iGaming. Again, the exact timing of approval for iGaming in these states has yet to be determined.
As the legal landscape surrounding sports wagering and iGaming continues to evolve, closely monitoring developments in these states is crucial.While the introduction of legislation is a significant step forward, the process of legalisation and implementation can vary widely, influenced by factors such as public opinion, political dynamics, and regulatory considerations.
Terefore, while these states may be on track to legislate sports wagering and iGaming, the precise timing and outcomes remain uncertain.
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