Seven States That Could See Online Gambling Expansion By 2020
Chris Krafcik of GamblingCompliance recently testified in front of the California Assembly Governmental Organization Committee on the current and future state of legal online gaming in the United States.
The presentation by Krafcik, GC’s research director, included several predictions about legalized online gaming in the U.S.
Krafcik called the current efforts in Pennsylvania, California and New York “Wave 2” of online gaming expansion in the U.S., which he characterizes as the time period from now until 2017. Krafcik went on to name four potential contenders (Rhode Island, Connecticut, Illinois, and Ohio) for what he is calling Wave 3, the period between 2018 and 2020.
According to GC, one or more Wave 2 states would pass an online gambling bill by 2017, and one or more of the Wave 3 states would pass online gaming legislation by 2020.
Here is where these states currently stand and their prospects for iGaming expansion by 2020.
‘Wave 2’ candidates
Pennsylvania (GamblingCompliance estimate 2015-2016)
Pennsylvania continues to look like the country’s best bet to legalize online gaming, but time is starting to run out on hopes for 2015.
If online gaming is going to be legalized in Pennsylvania it will almost certainly come via inclusion in the state’s budget. But Gov. Tom Wolf and Republican lawmakers are at an impasse over a budget that was supposed to be approved earlier this week. And there are still several wrinkles that need to be ironed out among legislators and casino operators.
The good news is, iGaming in Pennsylvania is starting to look like an inevitability; a case of, “if not this year than next.”
Why is there so much optimism in Pennsylvania? 11 of the state’s 12 casinos are on board. Lawmakers are pushing for gaming expansion. Regulators are confident they can handle it.
US Poker Prediction: Pennsylvania will legalize online gaming in 2015 or 2016.
California (GamblingCompliance estimate 2016-2017)
California continues to confound iGaming analysts. The state begins each year filling us full of hope and optimism that this will be “the year” for California and they’ll pass an online poker bill before pulling the rug right out from under us.
There are currently two and possibly three unresolved issues preventing California from passing an online poker bill:
- Does California need a bad actor/tainted asset clause?
- What role should the state’s horseracing industry play?
- Potential issue: Who will regulate the online poker sites?
Because of points 1 and 2 above, California appears to be at an impasse when it comes to online poker expansion. And even if these issues get resolved, point 3 could quickly rear its head when a bill starts to pin down specifics.
For iPoker to pass by 2017, there is going to have to be a dramatic change by one of the factions, and there has been no indication that anyone is ready to compromise to that extent.
US Poker Prediction: California will legalize online gaming no sooner than 2017.
New York (GamblingCompliance estimate 2016-2017)
New York is a bit of a long shot for expansion in 2016 or 2017 in my opinion.
For New York to join the ranks of regulated online gaming jurisdictions, a number of lawmakers in the Empire State have indicated they must first get their brick and mortar casinos up and running.
Even when this occurs, lawmakers will likely want to see a couple years of revenue results before voting on another expansion of gaming in the state.
In New York’s favor, lawmakers in the Assembly (J. Gary Pretlow) and Senate (John Bonacic) have introduced online gaming bills in 2014 and/or 2015. Thus far, these bills haven’t gained any traction, and even Pretlow is somewhat pessimistic about expansion in the near term.
On the lobbying front, MGM is making a strong push for iGaming expansion through their Let NY Play campaign, but MGM was also passed over for one of the state’s land-based licenses, which might quell their push.
US Poker Prediction: New York will legalize online gaming no sooner than 2017.
‘Wave 3’ candidates
Connecticut (GamblingCompliance estimate 2018-2020)
Even though there is little public push for online gambling expansion in Connecticut, the state is a solid choice to pass an online gaming bill by 2020. The reason for this optimism has to do with the gaming dynamics in the state.
Foxwoods and Mohegan Sun have a veritable monopoly on legal gambling in Connecticut and seem to be behind just about every gaming expansion discussion.
In fact, Connecticut might even sneak into Wave 2 if Foxwoods and Mohegan Sun decide they’re interested in iGaming expansion. That speculation is based on comments by Foxwoods Director of Administration of Interactive Gaming Frank Pracukowski, who told attendees at the C5 Online Gaming Conference the state has told the two Indian tribes, “When you’re ready [for online gaming] you come to us.”
If the Pequot and Mohegan tribes decide they want online gambling, it might breeze through the legislature very quickly.
US Poker Prediction: Connecticut could legalize online gaming as soon as 2016.
Rhode Island (GamblingCompliance estimate 2018-2020)
Because of the state’s small size (less than 1 million residents) Rhode Island will need several things to occur before they even consider passing an online gaming bill:
- Multiple other states to pass online gambling bills
- A willingness from these states to enter into interstate agreements with Rhode Island.
US Poker Prediction: Rhode Island will legalize online gaming no sooner than 2018.
Illinois (GamblingCompliance estimate 2018-2020)
Illinois is another state that could leapfrog some other contenders in the next couple years.
The state has already legalized online lottery sales, and this expansion has started paying massive dividends. The success of Illinois iLottery might accelerate the state’s timeline for online casino and/or poker.
There hasn’t been any recent iGaming expansion talk, but there has been some in the past, so the framework for a bill has already been laid.
US Poker Prediction: Illinois could legalize online gaming as soon as 2017.
Ohio (GamblingCompliance estimate 2018-2020)
A bit of a dark horse on GamblingCompliance’s list, Ohio looks like a good candidate on paper, considering the state has a strong brick and mortar casino industry and is looking for new revenue streams.
However, there has been little public mention of iGaming expansion in Ohio to date.
Furthermore, gaming expansion (of any kind) has been a hot-button issue. Current Governor John Kasich tried to expand gaming in the state early in his tenure by adding video lottery terminals at seven of the state’s racetracks, but the move has been met with stiff resistance and is currently being settled in court.
Online expansion would likely meet a similar fate, and with the Governor entertaining runs for higher office, it’s unlikely he’ll want to talk about iGaming until after the 2016 elections.
US Poker Prediction: Ohio will legalize online gaming no sooner than 2018.
Photo by Niklas Morberg used under license CC BY-SA 2.0.