The ScoreMetrics Lab is here with the latest developments on legal sports betting in the US.
While legal sports betting is about to start soon in Tennessee, there was a major step back in California – one of the biggest and potentially juiciest markets in the country.
Let’s inspect what this means for bettors in the two states.
Tennessee to open soon
A bill for legal sports betting was passed in Tennessee in the spring of 2019. With almost seven million people living in the state, bookmakers are eager to get into the market. Tennessee Lottery has been taking in applications from sports betting operators since April 2020 but have not approved any operators yet.
The state has planned to launch legal sports betting during the third quarter of 2020 but hitting that target might prove to be difficult.
Besides the fact that no sportsbooks have gotten permits to operate in the state, the schedule for the launch of legal sports betting is affected by the resignation of Jennifer Roberts, the now former director of Tennessee Sports Betting. Additionally, Tennessee Lottery has been busy bringing in new hires to manage the launch.
There is both promise and some negatives for the launch from the perspective of both bettors and sportsbooks. Unlike in many other states, there are no casinos in Tennessee, and bookmakers do not have to partner up with them and launch retail operations. Instead, we are likely looking at a fully mobile betting market, which is convenient for customers and has shown to be the biggest source of income in other states.
On the other hand, the state has introduced a mandatory 10% hold for bets, which means that bettors will be paying a higher fee for their action (practically in the form of less favorable odds) when compared to most states. This could mean that the sort of potential customers that are currently using the services of illegal bookmakers will keep on doing so in the future as well.
The state has said that they might revisit the rules of sports betting one year after launch.
California legal sports betting bill pulled
While the folks in Tennessee are finalizing the details for launching a legal sports betting market, things have taken a turn for the worse in the most populous state in the country as the proposed sports betting bill was pulled in California.
A bill can now be on a ballot earliest in 2022, which makes it unlikely for sports betting to be legal in the state before 2023. Californians will have to continue venturing to Nevada for their legal sports wagers, and bookmakers are obviously disappointed that the potentially juiciest market in the US will not become available in the very near future.
The bill that was pulled (SCA 6) faced problems due to bad timing and opposition from tribal casinos. The COVID-19 shutdown made it hard to discuss the bill, and the California congress was not very keen on focusing on sports betting in the midst of dealing with the current health crisis.
The tribal casinos in the state, an $8 billion per year industry, were also not supporting the bill. They were collecting signatures for their own sports gambling bill before the COVID-19 outbreak and were looking for more regulation to protect their businesses, naturally aiming to capture a large part of the market. SCA 6 would have allowed mobile betting in California if passed, and that would have potentially made tribal casinos lose out on a lot of revenues.
The tribes in the state generate almost 30% of nationwide tribal casino revenues, while generating more than a hundred thousand jobs and $3 billion in annual taxes and revenue sharing payments.
The next two years should see all the parties discuss details and come up with a bill that satisfies everyone. Hopefully we will be seeing legal sports bets wagered in California in 2023.
Legal sports betting is growing fast
2020 has been a big year for legal sports betting in the US. For some of the latest developments, have a look at our recent articles:
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The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.