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In 2018, the U.S. Supreme Court overturned a federal law banning sports betting and gave states the authority to make decisions on whether to allow sports betting or not. Since that ruling, over 20 states have enacted legislation to legalize at least some form of sports betting within the state.
Variety of Legalization
There has been a wide variety in the thoroughness of legalization for sports betting between the states that have enacted some form of legislation since the Supreme Court ruling. Some states have allowed for a fairly open policy that allows for online sports betting and regulation by tribal governments as well as other groups. However, other states have been more narrow in the scope of their legalization.
For instance, Washington State has passed legislation for legal sports betting inside tribal casinos only.
A Measured Approach
There is a big split in opinion over the benefits of sports betting to tribal casinos. While a few casinos moved quickly to add sports betting into their facilities, most are taking a more cautious approach. Many tribal casinos plan to wait a few years to see how things go at other venues before taking action. By doing so, they will be in a position to roll out sports betting in the smartest way.
There is some excitement for sports betting in tribal casinos since it adds another revenue path. However, there are many drawbacks to sports betting as well. There are several issues that need to be considered when weighing whether or not to add sports betting.
Low Profitability
One of the main marks against sports betting is that it is not a very profitable enterprise for a casino. Casinos only have so much floor space and the space used for sports betting could be occupied by something more profitable, such as slot machines.
While a sportsbook makes around five percent on the dollar, slot machines in the same space can pull in approximately nine percent on the dollar. Sports betting also has a much higher overhead as more staffing is required.
Greater Patronage
On the flip side of that argument, there is the belief that having sports betting in the casino will draw in a larger crowd. The casinos could easily make up for the potential loss of using valuable floor space for sports betting if the new gaming option ends up significantly increasing attendance.
Exaggerated Projections
There is also a significant amount of skepticism over the projected draw of sports betting. Several of the projections for the potential profitability of legalized sports betting are based on estimates about the annual amount of illegal sports betting that occurs every year. Many people have doubts over how much of that illegal gambling would shift to legal venues and how much would continue as before.
Online Gambling
Another big question is about allowing online sports betting. Tribal casinos have many concerns over online gambling. Other groups being allowed to run online gambling platforms are obviously the biggest concern. However, even tribal-run online gambling still comes with a lot of question marks.
While casinos make money from online gambling, the worry that it leads to fewer people at the physical casinos is a big one. Online gambling has the benefit of drawing more people in since they can gamble from wherever they are at any time. However, that number really needs to be significantly higher to make up for the loss of patronage.
Gambling is the primary draw of a casino. However, they do make a significant portion of their profits from their other offerings. When people are gambling online, they aren't dining at restaurants, attending live shows, or spending money on lodging.
While on-site sports betting could potentially increase these other revenue streams, online gambling has a high potential of lowering them.
Overall Demand Is High
Tribal casinos may be divided on their stance in regards to sports betting, but the public demand is high. With real-time sports odds software, everyone thinks they can be a winner.
Sports betting is going to continue to grow as more and more states pass legislation, and more paths to gambling are created. It is going to be an issue for tribal casinos whether they enact sports betting in their own facility or not. All casinos will need to work hard to find the right answer moving forward.
