Economics

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U.S. Lottery Industry, Native American Tribes Want Pieces of Regulated Sport Betting Market

13 Jun, 2018

By: Michael Popke

Now that states are free to allow legalized sports betting, the lottery industry and Native American tribes are eager to get involved.

“U.S. lotteries remain keenly focused on any activities that might help or hinder their mission to maximize revenues for good causes in all lottery jurisdictions,” the North American Association of State and Provincial Lotteries (NASPL) announced in a statement following the U.S. Supreme Court’s May 14 ruling. “U.S. lotteries already have strong relationships with more than 200,000 retail locations across all lottery jurisdictions, many of which are the bars, clubs and pubs that would be natural venues for sports-betting products. In addition, some American lotteries already sell their products on the Internet, a potential avenue for sports betting if a state allows that option. … [A]ll lotteries have the technical expertise to offer a wealth of detailed sports information — upon which sports bettors rely — via their well-developed websites, and most also have mobile apps.”

The U.S. lottery industry generates about $80 billion in annual sales, more than the American casino industry wins from gamblers on an annual basis, according to CardPlayer.com. And research firm Technavio estimates the U.S. lottery industry is expected to see a compound annual growth rate of 5.7 percent over the next four years.

About two dozen states already are either exploring legislation to legalize sports betting or have already done so, according to Casino.org.

NASPL supports states’ rights when it comes to gambling. “We believe that the use, regulation and ultimate beneficiaries of the Internet for gaming are best left to the legislative determination of each state,” the organization said in its statement. “Throughout U.S. history, states have retained, under the Tenth Amendment to the Constitution, the authority to establish their own gambling policies and the federal government has deferred to the states by enacting only the laws necessary to support state policies.”

Casey Clark, spokesperson for the American Gaming Association (representing the casino industry), told CDC Gaming Reports that Nevada already has demonstrated how to operate an effective sports betting operation at the state level. “States don’t have to look further than Nevada for a model on how to operate a successful, legal sports betting market,” he said. “There is no need to reinvent the wheel.”

Meanwhile, Native American tribes want a piece of the sports betting action, too.

“For three decades, federal legislation has allowed the tribes to operate casinos dominated by slot machines and blackjack tables. Now … industry experts say what may become a years-long fight over control of sports betting will hinge on the fine print of a series of gambling agreements between state governments and Indian tribes,” reports The New York Times.

For example, two federally recognized tribes in Connecticut, the Mashantucket Pequot Tribe and the Mohegan Tribe, operate the Foxwoods Resort Casino and the Mohegan Sun, respectively. Leaders of both tribes, according to The Times, insist “they alone have the legal authority to offer sports betting, according to their compacts with the state. They say the state may incur a steep penalty if it violates those agreements.”

“State officials disagree,” the paper continues. “Proposed legislation would allow the two tribes, the Connecticut Lottery Corporation, and Sportech, which operates off-track betting parlors in the state, to offer sports betting.”

In California, legalizing sports betting requires amending the state’s Constitution, and lawmakers, lobbyists and tribal leaders “are now girding for a drawn-out … fight before anyone in the state makes a legal bet on a sporting event,” The Times reports.

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